Which of the following formulas can be used to calculate the debt ratio?
A)Total Equity/Total Liabilities
B)Total Liabilities/Total Equity
C)Total Liabilities/Total Assets
D)Total Assets/Total Liabilities
E)Total Equity/Total Assets

Question

Quizplus · Accepted Answer

The debt ratio can be calculated by dividing the total liabilities by the total assets. This gives us a measure of how much of a company's assets are financed by debt. A higher debt ratio indicates that a company has more debt relative to its assets, which could be a red flag for potential investors.

Which of the Following Formulas Can Be Used to Calculate