Question

The following information is available from the most recent financial statements of the Attaché Corporation:

Total assets $800,000
Net income 120,000
Average total liabilities 400,000
Sales revenue 1,500,000
Total liabilities 500,000
Average total assets 700,000

What is the debt-to-asset ratio?

Answer 1

Answer: The ratio would be 8:5.

Explanation:

Debt to asset ratio is the ratio of total liabilities to total assets.

since we have given that

Total assets = $800000

Total liabilities = $500000

So, the debt to asset ratio would be

`(debt)/(Asset)=(800000)/(500000)=(8)/(5)`

so, the ratio would be 8:5.