Question

Duke Company has short-term liabilities of $30,000, long-term liabilities of $20,000, common stockholders' equity of $90,000, and total stockholders' equity of $100,000 (including the common). Duke's ratio of liabilities to stockholders' equity is:_______.

a. 50%.
b. 20.
b. 20%.
c. 8%.
d. 8.

Answer 1

Answer: A. 0.5 or 50%

Step-by-step explanation:

The ratio of liabilities to stockholders equity is calculated as;

Short-term liabilities + Long term liabilities ÷ total stockholders eating

Which is;

(30000+20000)/100000

=50000/100000

=0.5 or 50%