Which of the following has the best debt-to-asset ratio?
A)John has total assets of $600 000 and total debt of $400000.
B)Fred has total assets of $36 000 and total debt of $23000.
C)Maria has a monthly gross income of $8000 and expenses of $6000.
D)Cassandra has a gross monthly income of $2000 and expenses of $1200.

Question

Quizplus · Accepted Answer

Debt-to-asset ratio measures the proportion of debt relative to total assets. The lower the ratio, the better the position of the individual/company. 
Calculation for each choice: 
A) Debt-to-asset ratio is 400000/600000=0.67
B) Debt-to-asset ratio is 23000/36000=0.64
C) This is not a relevant calculation for debt-to-asset ratio. 
D) This is not a relevant calculation for debt-to-asset ratio.

Which of the Following Has the Best Debt-To-Asset Ratio