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

-Refer to Exhibit 14-6. Given the information above, compute the debt-to-equity ratio (rounded to two decimal places) for Petrini Company.

Question

The following data came from the financial statements of Petrini Company:
 
-Refer to Exhibit 14-6. Given the information above, compute the debt-to-equity ratio (rounded to two decimal places) for Petrini Company.

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated by dividing total debt by total equity. From Exhibit 14-6, we can see that Petrini Company has total debt of $1,000,000 and total equity of $1,162,791. Therefore, the debt-to-equity ratio is $1,000,000 / $1,162,791 = 0.86 (rounded to two decimal places).

The Following Data Came from the Financial Statements of Petrini