Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. debt ratios the ford motor company (f) designs, ma

Debt Ratios The Ford Motor Company (F) designs, manufactures, markets, and sells cars, trucks, and...

70.2K

Verified Solution

Question

Accounting

Debt Ratios

The Ford Motor Company (F) designs, manufactures, markets, and sells cars, trucks, and sport utility vehicles (SUVs). Ford is a major competitor of General Motors Company (GM). The following data (in millions) were adapted from recent financial statements of Ford Motor Company:

Year 2 Year 1
Total assets $258,537 $256,540
Total liabilities 225,352 220,608
Total stockholders' equity 33,185 35,932

1. Compute the debt ratio for Years 1 and 2. Round to one decimal place.

Year 2 Year 1
Debt ratio _____ % _____ %

2. Given your answer to part (1), what is the ratio of stockholders' equity to total assets? Round to one decimal place.

Year 2 Year 1
Ratio of stockholders' equity to total assets ______ % _____ %

3. Are Ford's operations financed primarily with debt or equity?

Debt or Equity

4. Total liabilities have

increased or decreased

as a percent of total assets in Year 2; thus, creditors would feel

less or more safe.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students