If Simone Enterprises has a debt ratio of 40%,it means that for every $1 in _____,the firm has 40 cents in _____.
A)owners' equity; liabilities
B)assets; liabilities
C)owners' equity; assets
D)assets; owners' equity

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing a company's total liabilities by its total assets, indicating the proportion of a company's assets that are financed by debt. Therefore, if Simone Enterprises has a debt ratio of 40%, it means that for every $1 in assets, the firm has 40 cents in liabilities.

If Simone Enterprises Has a Debt Ratio of 40%,it Means