A company has assets of $350,000 and total liabilities of $200,000. Its debt-to-equity ratio is 0.6.

Name: A company has assets of $350,000 and total liabilities of $200,000. Its debt-to-equity ratio is 0.6.
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Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated as total liabilities divided by shareholders' equity. Shareholders' equity is assets minus liabilities, which is $150,000 ($350,000 - $200,000). The debt-to-equity ratio is $200,000 / $150,000 = 1.33, not 0.6.

A Company Has Assets of $350,000 and Total Liabilities of $200,000