Current assets are $200,000,long term assets are $300,000,current liabilities are $100,000,long-term liabilities are $200,000,paid-in capital is $150,000,and retained earnings total $50,000.What is the debt-to-total-assets ratio?

Question

Quizplus · Accepted Answer

To find the debt-to-total-assets ratio, we need to divide total liabilities (current liabilities + long-term liabilities) by total assets (current assets + long-term assets). Applying the given numbers, we get:
Debt-to-total-assets ratio = (100,000 + 200,000) / (200,000 + 300,000) = 0.6 or 0.6 to 1
Therefore, the correct choice is B.

Current Assets Are $200,000,long Term Assets Are $300,000,current Liabilities Are