Pavillion Corp.has $6,000,000 in total assets,$1,500,000 in current assets,and $4,000,000 in equity.Calculate the debt-to-equity ratio.
A)0.33
B)0.50
C)0.25
D)0.67

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated by dividing total liabilities by total equity. First, find total liabilities: Total Assets - Total Equity = $6,000,000 - $4,000,000 = $2,000,000. Then, calculate the ratio: $2,000,000 / $4,000,000 = 0.50.