If Perry Enterprises has a debt ratio of 40%,it means that for every $1 in _____,the firm has 40 cents in _____.
A)owners' equity;liabilities
B)assets;liabilities
C)owners' equity;assets
D)assets;owners' equity

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets, therefore it means that for every $1 in assets, the firm has 40 cents in liabilities.

If Perry Enterprises Has a Debt Ratio of 40%,it Means