The following data came from the financial statements of the Cheviot Company:

- Refer to Exhibit 14-4. Compute the asset-to-equity ratio (round to two decimal places).

Question

The following data came from the financial statements of the Cheviot Company:

- Refer to Exhibit 14-4. Compute the asset-to-equity ratio (round to two decimal places).

Quizplus · Accepted Answer

The asset-to-equity ratio is calculated by dividing total assets by total equity. In this case, total assets are $1,200,000 and total equity is $1,000,000. Therefore, the asset-to-equity ratio is $1,200,000 / $1,000,000 = 1.20.

The Following Data Came from the Financial Statements of the Cheviot