In 2014, The W D Co. had total liabilities of $22,704 million and total assets of $43,679 million. In 2013, they had total liabilities of $21,990 million and total assets of $41,378 million. Calculate their debt to equity ratio for 2014 and 2013, respectively.
A) .92 and .88
B) 1.08 and 1.13
C) .52 and .53
D) .48 and .47

Question

Quizplus · Accepted Answer

The debt to equity ratio is calculated as total liabilities divided by total equity. Total equity is total assets minus total liabilities. For 2014, equity is $43,679M - $22,704M = $20,975M, so the ratio is $22,704M / $20,975M = 1.08. For 2013, equity is $41,378M - $21,990M = $19,388M, so the ratio is $21,990M / $19,388M = 1.13.

In 2014, the W D Co