Connor Martin Corporation's balance sheet showed the following amounts: Current Liabilities,$10,000;Bonds Payable,$3,000;Lease Obligations,$4,000;and Notes Payable,$600.Total stockholders' equity was $12,000.The debt-to-equity ratio is
A)0.83.
B)1.47.
C)1.42.
D)0.63.

Question

Quizplus · Accepted Answer

1.47To calculate the debt-to-equity ratio, you add up all the liabilities and divide by the total stockholders' equity. Here, the total liabilities are $10,000 (Current Liabilities) + $3,000 (Bonds Payable) + $4,000 (Lease Obligations) + $600 (Notes Payable) = $17,600. The total stockholders' equity is $12,000. Thus, the debt-to-equity ratio is $17,600 / $12,000 = 1.47.

Connor Martin Corporation's Balance Sheet Showed the Following Amounts: Current