Question

At the beginning of the current year, Snell Co. total assets were $264,000 and its total liabilities were $182,200. During the year, the company reported total revenues of $109,000, total expenses of $84,000 and dividends of $13,000. There were no other changes in equity during the year and total assets at the end of the year were $276,000. The company's debt ratio at the end of the current year is:

Answer 1

The company's debt ratio at the end of the current year is 66%

Step-by-step explanation:

For computing the debt ratio, we need to apply the formula which is shown below:

Debt ratio = (Total liabilities) ÷ (total assets) × 100

= ($182,200 ÷ $276,000) × 100

= 66%

The other information which are given in the question is of no use. That's why we do not consider it. Hence, ignored it.