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Hag question Edit question Evaluating Firm Solvency The following financial information is taken from the balance sheets of t
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Ans: Calculation of the debt-to-total assets ratio: (Total Debt / Total Assets) * 100
Particulars Calculations %
i. Benny Company (4,00,000/5,00,000) * 100 = 80 %
ii. Walter Company (9,00,000/10,00,000) * 100 = 90 %
Ans: Benny Company has higher level of solvency, since it has lower debt-to-total assets ratio.
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