The liabilities of a company at the end of the year are $500,000 and the total stockholders' equity at the end of the year is $1,500,000.The debt to stockholders' equity ratio is:
A)0.50 to 1.
B)0.33 to 1.
C)0.67 to 1.
D)3.00 to 1.

Question

Quizplus · Accepted Answer

Debt to stockholders' equity ratio can be calculated by dividing total liabilities by total stockholders' equity.

Debt to stockholders' equity ratio = Total liabilities / Total stockholders' equity
= $500,000 / $1,500,000
= 0.33 to 1

Therefore, the correct answer is B, 0.33 to 1.

The Liabilities of a Company at the End of the Year