The formula for calculating the debt ratio is
A)total liabilities divided by total assets.
B)long-term liabilities divided by total assets.
C)Total liabilities divided by total liabilities and stockholders' equity.
D)total debt divided by total stockholders' equity.

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets. This ratio indicates the percentage of a company's assets that are financed by debt rather than equity.

The Formula for Calculating the Debt Ratio Is