Igor the intern has obtained the following financial data for PDQ Corporation:

The leverage ratio for 2022 is:
A)1.6667
B)1.9655
C)26.32%
D)86.21%

Question

Igor the intern has obtained the following financial data for PDQ Corporation:

The leverage ratio for 2022 is:
A)1.6667 
B)1.9655 
C)26.32% 
D)86.21%

Quizplus · Accepted Answer

The leverage ratio is calculated as Total Debt / Total Equity. 
For 2022, the total debt is $19,800,000 and the total equity is $10,074,000. 
Therefore, the leverage ratio is: 
$19,800,000 / $10,074,000 = 1.9655 
So, the correct answer is B.

Igor the Intern Has Obtained the Following Financial Data for PDQ