FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
From the chart below, what is the correct Debt Ratio?
Current Assets | $1,350 |
Total Assets | $2,500 |
Operating Profit | $475 |
Debt | $975 |
Net Income | $300 |
Inventory | $450 |
Cost of Goods Sold | $525 |
Sales | $1,350 |
Current Liabilities | $800 |
Total Equity | $1,525 |
Total Liabilities and owners equity | $2,500 |
Expert Solution
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Step 1 Introduction
The ratio analysis helps to analyse the financial statements of the business with respect to various elements of the financial statements. The debt ratio is calculated as total liabilities divided by total assets.
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