Question

At the end of the current year, Leer Company reported total liabilities of $319,000 and total equity of $119,000. The company's debt ratio on the last year-end was:___________.

a. 72.8%.
b. 268%.
c. 3-68%.
d. 37.3%.
e. $438,000

Answer 1

72.8%

Step-by-step explanation:

The first step is to calculate the total assets

Total assets= Total liabilities + total equity

= $319,000 + $119,000

= $438,000

Therefore the debt ratio can be calculated as follows

= Total liabilities/total assets

= $319,000/$438,000

= 0.728×100

= 72.8%