Rosewood Company had current assets of $582, current liabilities of $433, total assets of $732, and no long-term liabilities. What is Rosewood's debt ratio?

Question

Quizplus · Accepted Answer

Debt ratio = total liabilities / total assets. Since Rosewood has no long-term liabilities, its total liabilities are equal to its current liabilities of $433. Therefore, the debt ratio is 433/732 = 0.59.

Rosewood Company Had Current Assets of $582, Current Liabilities of $433