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

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

Quizplus · Accepted Answer

Debt ratio is calculated by dividing the total liabilities by total assets.

Debt Ratio = Total Liabilities / Total Assets

Using the information from the exhibit, we get:

Debt Ratio = 320,000 / 700,000 = 0.46

Therefore, the debt ratio for Petrini Company is 0.46 rounded to two decimal places.

The Following Data Came from the Financial Statements of Petrini