Which of the following best describes the debt to equity ratio?
A) Average total assets divided by total liabilities
B) Average total assets divided by stockholders' equity
C) Stockholders' equity divided by total liabilities
D) Total liabilities divided by stockholders' equity

Question

Quizplus · Accepted Answer

The debt to equity ratio is calculated by dividing total liabilities by stockholders' equity, indicating the proportion of company financing that comes from creditors versus shareholders.

Which of the Following Best Describes the Debt to Equity