On December 31,2015,a company had assets of $16 billion and stockholders' equity of $8 billion.That same company had assets of $20 billion and stockholders' equity of $9 billion as of December 31,2016.During 2016,the company reported total sales revenue of $9 billion and total expenses of $7 billion.What is the company's debt-to-assets ratio on December 31,2016?
A) 0.55
B) 0.45
C) 0.035
D) 0.01

Question

Quizplus · Accepted Answer

The debt-to-assets ratio is calculated as (Total Assets - Stockholders' Equity) / Total Assets. For December 31, 2016, it is ($20 billion - $9 billion) / $20 billion = $11 billion / $20 billion = 0.55.

On December 31,2015,a Company Had Assets of $16 Billion and Stockholders