The liabilities of a company at the end of the year are $500,000 and the total stockholders' equity at the end of the year is $1,500,000. The ratio of liabilities to stockholder's equity is:
A) 0.50.
B) 0.33.
C) 0.67.
D) 3 to 1.

Question

Quizplus · Accepted Answer

The ratio of liabilities to stockholder's equity is calculated as $500,000 (liabilities) / $1,500,000 (stockholders' equity) = 0.33.

The Liabilities of a Company at the End of the Year