Compute the debt to assets ratio for the current year.
A) 20
B) 67
C) 17
D) 33

Question

Quizplus · Accepted Answer

The Debt to Assets ratio is calculated by dividing total liabilities by total assets.

Debt to Assets Ratio = Total Liabilities / Total Assets

From the given information, 
Total Liabilities = $50,000 
Total Assets = $300,000

Putting these values in the formula mentioned above, we get:

Debt to Assets Ratio = $50,000 / $300,000 = 0.1667

Multiplying it by 100 to express it in percentage, we get:

Debt to Assets Ratio = 16.67%

Therefore, the Debt to Assets Ratio for the current year is 17%. Thus, the best choice is C.

Compute the Debt to Assets Ratio for the Current Year