The following partial balance sheet is provided for Groom Company:

What is the company's debt to assets ratio? (Rounded to nearest whole percent. )
A)49%
B)16%
C)33%
D)Cannot be determined with the information given.

Question

The following partial balance sheet is provided for Groom Company:

What is the company's debt to assets ratio? (Rounded to nearest whole percent. )
A)49% 
B)16% 
C)33% 
D)Cannot be determined with the information given.

Quizplus · Accepted Answer

Recall that total assets equal total liabilities and stockholders' equity.
Debt to assets = Total liabilities ÷ Total assets
Debt to assets = ($9,000 + $12,000 + $20,000)÷ $125,000 = $41,000 ÷ $125,000 = 33%

The Following Partial Balance Sheet Is Provided for Groom Company