Dr. Badger's Pet Store is applying for a loan from the bank. The company has liabilities of $670,000 and owners' equity of $250,000. What is the debt to owners' equity ratio for Dr. Badger's Pet Store?
A) 4.20 percent
B) 3.11 percent
C) 2.68 percent
D) 0.37 percent
E) 1.10 percent

Question

Quizplus · Accepted Answer

The debt to owners' equity ratio is calculated by dividing the total liabilities by the owners' equity. In this case, it is $670,000 / $250,000 = 2.68.

Dr Badger's Pet Store Is Applying for a Loan from the Bank