The following financial statement data are taken from Xeron Company's 2012 annual report: $\begin{array}{lr}
&\text { (in millions) }\
\text { Current assets } & \$ 12.6 \
\text { Investments } & 9.4 \
\text { Intangibles } & 6.8 \
\text { Property, plant, and equipment } & 58.1 \
\text { Current liabilities } & 6.4 \
\text { Long-term debt } & 39.7 \
\text { Stockholders' equity } & 40.8
\end{array}$ Compute the debt ratio.
A)196.9%
B)113.0%
C)53.0%
D)45.7%
E)none of the answers are correct

Question

Quizplus · Accepted Answer

The debt ratio is calculated as total liabilities divided by total assets. Total liabilities = Current liabilities + Long-term debt = 6.4 + 39.7 = 46.1. Total assets = Current assets + Investments + Intangibles + Property, plant, and equipment = 12.6 + 9.4 + 6.8 + 58.1 = 86.9. Debt ratio = 46.1 / 86.9 = 0.53 or 53.0%.

The Following Financial Statement Data Are Taken from Xeron Company's