At the end of the current year,James Co.reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio was:
A)300%.
B)33%.
C)75%.
D)67%.
E)$400,000.

Question

Quizplus · Accepted Answer

The debt ratio is calculated as total liabilities divided by total assets. Given total liabilities of $300,000 and total equity of $100,000, total assets would be $400,000 ($300,000 + $100,000). Thus, the debt ratio is $300,000 / $400,000 = 0.75 or 75%.

At the End of the Current Year,James Co