Karma Corporation has total assets of $190,000 and total liabilities of $90,000. The corporation's debt-to-equity ratio is closest to:
A) 0.47
B) 0.90
C) 0.53
D) 0.32

Question

Quizplus · Accepted Answer

Debt-to-Equity Ratio = Total Liabilities/Total Equity
Total Equity = Total Assets - Total Liabilities
Total Equity = $190,000 - $90,000 = $100,000
Debt-to-Equity Ratio = $90,000/$100,000 = 0.9

Karma Corporation Has Total Assets of $190,000 and Total Liabilities