Refer to the following selected financial information from Winterfell Company.Compute the company's debt to equity for Year 2.
A)0.9.
B)1.1.
C)0.5.
D)1.9.
E)2.1.

Question

Refer to the following selected financial information from Winterfell Company.Compute the company's debt to equity for Year 2. 
A)0.9. 
B)1.1. 
C)0.5. 
D)1.9. 
E)2.1.

Quizplus · Accepted Answer

Debt to Equity = Total Liabilities / Total Equity

For Year 2: 
Total Liabilities = 360,000 
Total Equity = 320,000

Debt to Equity = 360,000 / 320,000 = 1.125 or 1.1 rounded to one decimal place

Therefore, the company's debt to equity for Year 2 is 1.1.

Refer to the Following Selected Financial Information from Winterfell Company