$$\begin{array}{l}
\begin{array} {lll }
&£000\
\text {Nan-current assets}&22,000\
\text {current assets}&12,000\
\text {Equity}&14,000\
\text {Nan-Eurrentliabilities}&10,00\
\text {Current liabilities}&10,000\
\end{array}
\end{array}$$ Based on the above figures, what is the debt ratio?

Question

$$\begin{array}{l}
\begin{array} {lll } 
&£000\
\text {Nan-current assets}&22,000\
\text {current assets}&12,000\
\text {Equity}&14,000\
\text {Nan-Eurrentliabilities}&10,00\
\text {Current liabilities}&10,000\
\end{array}
\end{array}$$ Based on the above figures, what is the debt ratio?

Quizplus · Accepted Answer

The debt ratio is calculated as total debt divided by total assets. Total debt includes both non-current liabilities and current liabilities, which sum to $10,000 + 10,000 = 20,000$. Total assets include non-current assets and current assets, which sum to $22,000 + 12,000 = 34,000$. Therefore, the debt ratio is $20,000 / 34,000 = 0.588$, which rounds to 0.59:1.

Based on the Above Figures, What Is the Debt Ratio