FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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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