Total assets on your balance sheet are $6,000 and liabilities are $2,000. Your solvency ratio will be:
A)30%.
B)33%.
C)67%.
D)85%.
E)75%.

Question

Quizplus · Accepted Answer

The solvency ratio is calculated as (Total Equity / Total Assets) * 100. Here, Total Equity = Total Assets - Total Liabilities = $6,000 - $2,000 = $4,000. So, the solvency ratio = ($4,000 / $6,000) * 100 = 66.67%, which rounds to 67%.

Total Assets on Your Balance Sheet Are $6,000 and Liabilities