A company has total assets of $350,000 and total liabilities of $200,000.Its debt-to-equity ratio is 0.6.

Name: A company has total assets of $350,000 and total liabilities of $200,000.Its debt-to-equity ratio is 0.6.
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Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated as total liabilities divided by total equity. Total equity is total assets minus total liabilities, which in this case is $350,000 - $200,000 = $150,000. The debt-to-equity ratio would therefore be $200,000 / $150,000 = 1.33, not 0.6.

A Company Has Total Assets of $350,000 and Total Liabilities