In 2016, Bubble Inc. had net income of $500,000, assets of $5,000,000, sales of $2,000,000, and equity of $2,000,000. In 2017, Bubble Inc. had net income of $600,000, assets of $7,000,000, sales of $1,300,000, and equity of $1,700,000. Is Bubble Inc's 2017 debt to total asset better than its 2016 debt to total assets?
A) No
B) Yes
C) Stayed the same
D) Not enough information to answer

Question

Quizplus · Accepted Answer

2016 debt to assets = (5,000,000 − 2,000,000)/5,000,000 = 60%
2017 debt to assets = (7,000,000 − 1,700,000)/7,000,000 = 76%