The liabilities of a company at the end of the year are $500,000 and the total stockholders' equity at the end of the year is $1,500,000. The ratio of liabilities to stockholders' equity is
A) 0.50 to 1.
B) 0.33 to 1.
C) 0.67 to 1.
D) 3 to 1.

Question

Quizplus · Accepted Answer

The ratio of liabilities to stockholders' equity is calculated by dividing the total liabilities by the total stockholders' equity: $500,000 / $1,500,000 = 0.33 to 1.

The Liabilities of a Company at the End of the Year