A firm has a long-term debt-equity ratio of 0.4. Shareholders’ equity is $.95 million. Current assets are $350,000, and the current ratio is 2.0. The only current liabilities are notes payable. What is the total debt ratio? (Round your answer to 2 decimal places.)
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
A firm has a long-term debt-equity ratio of 0.4. Shareholders’ equity is $.95 million. Current assets are $350,000, and the current ratio is 2.0. The only current liabilities are notes payable. What is the total debt ratio? (Round your answer to 2 decimal places.)
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