Moore Masonry has current assets of $52,100,long-term assets of $263,700,current liabilities of $39,600,and long-term debt of $156,700.Moore's debt ratio is:
A)74.4%.
B)49.6%.
C)62.2%.
D)59.4%.

Question

Quizplus · Accepted Answer

Debt ratio = Total Debt / Total Assets
Total Assets = Current Assets + Long-term Assets = $52,100 + $263,700 = $315,800
Total Debt = Current Liabilities + Long-term Debt = $39,600 + $156,700 = $196,300

Debt ratio = $196,300 / $315,800 = 0.622 = 62.2%

Therefore, the best choice is C, with an explanation as shown above.

Moore Masonry Has Current Assets of $52,100,long-Term Assets of $263,700,current