Question

The Fram family has liabilities of $167,00 and assets of $433,000.
What is their debt ratio?

Answer 1

Their debt ratio is about 0.039.

Step-by-step explanation:

Given information:

liabilities = $16700

Assets = $433,000

We need to find their debt ratio.

`\text{Debt ratio} = (Liabilities)/(Assets)`

Substitute the given values in the above formula.

`\text{Debt ratio} = (16700)/(433000)`

`\text{Debt ratio} = (167)/(4330)`

`\text{Debt ratio} \approx 0.038568`

`\text{Debt ratio} \approx 0.039`

Therefore, their debt ratio is about 0.039.