Krakov Company has total assets of $170,000 and total liabilities of $80,000.The company's debt-to-equity ratio is closest to:
A) 0.32 to 1.
B) 0.47 to 1.
C) 0.53 to 1.
D) 0.89 to 1.

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated as total liabilities divided by total equity. Total equity is total assets minus total liabilities, which is $170,000 - $80,000 = $90,000. The ratio is $80,000 / $90,000 = 0.89 to 1.

Krakov Company Has Total Assets of $170,000 and Total Liabilities