At the beginning of the year,a firm had $120,000 in total assets and a debt-to-assets ratio of 0.5 or 50%.During the year,the firm's assets increased by $40,000,and its liabilities increased by $36,000.What is the debt-to-assets ratio at the end of the year?
A) 0.6 or 60%
B) 0.4 or 40%
C) 0.9 or 90%
D) 1.7 or 170%

Question

Quizplus · Accepted Answer

At the end of the year, total assets are $160,000 ($120,000 + $40,000) and total liabilities are $96,000 ($60,000 + $36,000). The debt-to-assets ratio is $96,000 / $160,000 = 0.6 or 60%.

At the Beginning of the Year,a Firm Had $120,000 in Total