A company has total liabilities of $550 million and total equity of $300 million.Calculate this company's debt ratio.
A)64.7%
B)100%
C)54.5%
D)1.83 to 1
E)The debt ratio cannot be determined without additional information.

Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total liabilities by the sum of total liabilities and total equity. Here, it is $550 million / ($550 million + $300 million) = 0.647 or 64.7%.

A Company Has Total Liabilities of $550 Million and Total