Karl Company has total assets of $170,000 and total liabilities of $110,000.The company's debt-to-equity ratio is closest to which of the following?
A) 0.33 to 1.
B) 0.39 to 1.
C) 0.65 to 1.
D) 1.83 to 1.

Question

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated as total liabilities divided by total equity. Total equity is total assets minus total liabilities, which is $170,000 - $110,000 = $60,000. The debt-to-equity ratio is $110,000 / $60,000 = 1.83 to 1.

Karl Company Has Total Assets of $170,000 and Total Liabilities