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Shown below are selected data from the balance sheet of Compros,a small electronics store (dollar amounts are in thousands):

-200 What is Compros' debt ratio?
A)75%
B)25%
C)60%
D)33%

Question

[The following information applies to the questions displayed below.]
Shown below are selected data from the balance sheet of Compros,a small electronics store (dollar amounts are in thousands):
 
-200 What is Compros' debt ratio?
A)75% 
B)25% 
C)60% 
D)33%

Quizplus · Accepted Answer

Compros' debt ratio is calculated by dividing its total debt by its total assets. If the debt ratio is 75%, it means that 75% of the company's asset financing comes from debt, indicating a higher leverage.

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