Which of the following is the formula to compute the debt ratio?
A) The formula is Total assets/Total liabilities.
B) The formula is Income from operations/Interest expense.
C) The formula is Interest expense/Income from operations.
D) The formula is Total liabilities/Total assets.

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total liabilities by total assets (Total liabilities/Total assets), which measures the proportion of a company's assets that are financed by debt.

Which of the Following Is the Formula to Compute the Debt