Converse Florists & Co. reported assets of $1,000 and equity of $450. What is its debt ratio? (Round your percentage answer to two decimal places.)

Question

Quizplus · Accepted Answer

The debt ratio is calculated as total liabilities divided by total assets. Given that equity is $450 and assets are $1,000, liabilities can be calculated as $1,000 (assets) - $450 (equity) = $550. Therefore, the debt ratio is $550 / $1,000 = 0.55 or 55.00%.