Question

Durable Plastics Company had the following total​ assets, liabilities, and equity as of December 31.Total Assets$ 450 comma 000Total Liabilities131 comma 000Total Equity319 comma 000What is the​ company's debt ratio as of December​ 31? (Round your percentage answer to two decimal​ places.)

Answer 1

Answer: Debt ratio = 29.11%

Step-by-step explanation:

A company's Debt ratio explains the financial leverage of a company to paying off its liabilities using its assets by measuring a company's total liabilities as a percentage of its total assets.

Given ,

Total Assets $ 450,000

Total Liabilities $131, 000

Total Equity $319,000

Debt ratio = Total Liabilites /total asset x 100

=131000/450000 X 100

= 29.11%