Narlock Company's debt-to-equity ratio at the end of 20 × 6 was closest to:

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is the amount of debt a company has compared to shareholders' equity. To calculate it, we divide total liabilities by shareholders' equity. Based on the information provided, we can calculate Narlock Company's debt-to-equity ratio as follows:

Debt-to-equity ratio = Total liabilities / Shareholders' equity
Debt-to-equity ratio = $1,027,000 / $1,468,000
Debt-to-equity ratio = 0.700 to 1 (rounded to the nearest hundredth)

Therefore, the closest answer choice is C, which is 0.70 to 1.

Narlock Company's Debt-To-Equity Ratio at the End of 20 ×