Use this information to answer the following question. The debt to equity ratio is
A)0.48.
B)0.34.
C)0.52.
D)1.92.

Question

Use this information to answer the following question.  The debt to equity ratio is
A)0.48. 
B)0.34. 
C)0.52. 
D)1.92.

Quizplus · Accepted Answer

Based on the information provided, the debt to equity ratio can be calculated as total debt divided by total equity. Using the balance sheet equation (Assets = Liabilities + Equity), we can calculate the total equity as:

Total Equity = Assets - Total Debt
Total Equity = $1,400,000 - $800,000
Total Equity = $600,000

Now we can calculate the debt to equity ratio as:

Debt to Equity Ratio = Total Debt / Total Equity
Debt to Equity Ratio = $800,000 / $600,000
Debt to Equity Ratio = 1.33

Therefore, none of the answer choices listed are correct. However, the closest answer is C, which is 0.52 rounded to two decimal places.

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