Gem Jewelers has current assets of $687,600, total assets of $1,711,000, net working capital of $223,700, and long-term debt of $450,000. What is the debt-equity ratio?
A) 0.87
B) 0.94
C) 1.21
D) 1.15
E) 1.06

Question

Quizplus · Accepted Answer

Debt-equity ratio = Long-term debt / (Total assets - Current assets)= 450,000 / (1,711,000 - 687,600)= 450,000 / 1,023,400= 0.44

Gem Jewelers Has Current Assets of $687,600, Total Assets of $1,711,000