Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:
A) 0.29
B) 3.47
C) 0.22
D) 0.78

Question

Shipley Corporation has provided the following data from its most recent balance sheet:  The debt-to-equity ratio is closest to:
A) 0.29 
B) 3.47 
C) 0.22 
D) 0.78

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated by dividing the total liabilities by the total shareholders' equity. In this case, the total liabilities are $20,610,000 and the total shareholders' equity is $5,946,000. Thus, the debt-to-equity ratio is 20,610,000 / 5,946,000, which simplifies to approximately 3.47. Therefore, the closest answer is B, 3.47.

Shipley Corporation Has Provided the Following Data from Its Most