A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million.What is its owners' equity?

Name: A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million.What is its owners' equity?
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Quizplus · Accepted Answer

The assets-to-liabilities ratio of 3:2 means for every $3 of assets, there are $2 of liabilities. With $6 million in assets, liabilities are $4 million (since 3/2 = 6/x, x = 4). Owners' equity is assets minus liabilities, so $6 million - $4 million = $2 million.

A Company Has an Assets-To-Liabilities Ratio of 3:2 and Total