Which financial statement(s)do you need to calculate the debt-to-equity ratio?
A)only the income statement
B)only the balance sheet
C)both the income statement and the balance sheet
D)both the statement of cash flows and the income statement

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated using information from the balance sheet. Specifically, the total liabilities and total equity are needed to calculate the ratio. The income statement and statement of cash flows provide information on revenues, expenses, and cash flows but not on the total liabilities and equity of a company, which are necessary to calculate the debt-to-equity ratio.

Which Financial Statement(s)do You Need to Calculate the Debt-To-Equity Ratio