Kim's Kar Kare Service has total debt of $690, total assets of $1,260, interest expense of $140, and sales of $400. Which of the following is the debt ratio for the business?
A) 11.1 percent
B) 31.7 percent
C) 54.8 percent
D) 58 percent

Question

Quizplus · Accepted Answer

The debt ratio is calculated as total debt divided by total assets. In this case, it's $690 / $1,260 = 0.5476, which is approximately 54.8 percent.

Kim's Kar Kare Service Has Total Debt of $690, Total