Darmstadt Company presented the following data at the end of 2019:
Determine the debt-to-total assets ratio for Darmstadt Company (rounded).
A) 0.55
B) 0.35
C) 0.07
D) 0.61

Question

Darmstadt Company presented the following data at the end of 2019:
 Determine the debt-to-total assets ratio for Darmstadt Company (rounded).
A) 0.55 
B) 0.35 
C) 0.07 
D) 0.61

Quizplus · Accepted Answer

Total assets = Total liabilities + Stockholders' equity
X = ($450,000 + $1,650,000 + $600,000) + ($280,000 + $980,000 + $945,000)
X = $2,700,000 + $2,205,000
X = $4,905,000
Debt-to-total assets ratio = Total liabilities / Total assets
X = $2,700,000 / $4,905,000
X = 0.55

Darmstadt Company Presented the Following Data at the End of 2019