A company has total assets of $1,000, current liabilities of $130, and total liabilities of $350. What is the long-term debt ratio?
A) .19
B) .25
C) .36
D).31

Question

Quizplus · Accepted Answer

Equity = assets - liabilitiesEquity = $1,000 - 350Equity = $650Long-term debt ratio = long-term debt/(long-term debt + equity)Long-term debt ratio = ($350 - 130)/[($350 - 130) + $650]Long-term debt ratio = .25

A Company Has Total Assets of $1,000, Current Liabilities of $130