A company reports total assets of $910,000 and stockholders' equity of $530,000. Calculate the debt ratio. (Round your answer to two decimal places.)
A) 36.81%
B) 41.76%
C) 58.24%
D) 71.7%

Question

Quizplus · Accepted Answer

The debt ratio is calculated as total liabilities divided by total assets. Using this formula gives us: 
Debt ratio = (Total assets - Stockholders' equity) / Total assets = ($910,000 - $530,000) / $910,000 = 0.4176 or 41.76%. Therefore, the correct answer is B.

A Company Reports Total Assets of $910,000 and Stockholders' Equity