Compute each of the following ratios for Jarir, Inc. and Extra Inc. as of January 31, 2009, using the amounts originally reported in their balance sheets for the year.(1) Liabilities to Assets Ratio = Total Liabilities/Total Assets(2) Long-Term Debt to Long-Term Capital Ratio = Long-Term Debt/(Long-Term Debt +Shareholders’ Equity) Question# 2Some retailing companies own their own stores or acquire their premises under capital leases. Otherretailing companies acquire the use of store facilities under operating leases, contracting to make futurepayments. An analyst comparing the capital structure risks of retailing companies may want to adjustreported financial statement data to put all firms on a comparable basis. Certain data from the financialstatements of Jarir Inc. and Extra Inc. follow (amounts in millions).Balance Sheet as of January 31, 2009Jarir Inc.Extra Inc.Current Liabilities$2,158$1,255Long-term debt2,897Other non-current liabilities1,019946Sharcholders' equity4,3871,874Total$ 7,564$6,972Minimum Payment under operating leases2009$1,069$478201092745520117124162012520373| 2013386341After 2013$1,080$1,334Total$4,694$3,397

Financial ratios describe the magnitude of the two selected values which should be taken place…

Answered: Liabilities to Assets Ratio = Total…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 18PC

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Compute each of the following ratios for Jarir, Inc. and Extra Inc. as of January 31, 2009, using
the amounts originally reported in their balance sheets for the year.
(1) Liabilities to Assets Ratio = Total Liabilities/Total Assets
(2) Long-Term Debt to Long-Term Capital Ratio = Long-Term Debt/(Long-Term Debt +
Shareholders’ Equity)

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