If a bank has $100 million in assets and a net worth of $10 million, its debt-to-equity ratio is:

Name: If a bank has $100 million in assets and a net worth of $10 million, its debt-to-equity ratio is:
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Question

Quizplus · Accepted Answer

Debt-to-equity ratio is calculated by dividing the total debt of an organization with its total equity.

Total debt = total assets - net worth

= $100 million - $10 million

= $90 million

Thus,

Debt-to-equity ratio = Total debt / Total equity

= $90 million / $10 million

= 9 to 1

If a Bank Has $100 Million in Assets and a Net