Use the table for the question(s) below.
Consider the following balance sheet:

-When using the book value of equity,the debt to equity ratio for Luther in 2006 is closest to:
A) 2.21
B) 2.29
C) 2.98
D) 3.03

Question

Use the table for the question(s) below.
Consider the following balance sheet:
  
-When using the book value of equity,the debt to equity ratio for Luther in 2006 is closest to:
A) 2.21 
B) 2.29 
C) 2.98 
D) 3.03

Quizplus · Accepted Answer

B) D/E = Total Debt / Total Equity
Total Debt = (notes payable (10.5) + current maturities of long-term debt (39.9) + long-term debt (239.7) = 290.1 million
Total Equity = 126.6, so D/E = 290.1 / 126.6 = 2.29

Use the Table for the Question(s) Below