Question

Gi Gi's Bakery has total assets of $451 million. Its total liabilities are $123 million. Its equity is $328 million. Calculate the debt ratio.

Answer 1

27.27%

Step-by-step explanation:

With regards to the above, the formula for debt ratio is

= Total liabilities ÷ Total assets

Given that;

Total liabilities = $123 million

Total assets = $451 million

Debt ratio = $123 million ÷ $451 million

Debt ratio = 0.27272727

Debt ratio is 27.27%

Therefore, the debt ratio is 27.27%