Question

The Jeffer's company has a debt ratio (total debt to total assets) of 0.365. If their total debt is $500,000, what are their total assets?

Answer 1

Given:

Total debt ratio (total debt to total assets) = 0.365

Total debt = $500,000

To find:

The total assets.

Solution:

We know that,

`\text{Total debt ratio}=\frac{\text{Total debt}}{\text{Total assets}}`

On substituting the given values, we get

`0.365=\frac{500,000}{\text{Total assets}}`

`\text{Total assets}=(500,000)/(0.365)`

`\text{Total assets}=1369863.0137`

Therefore, the value of total assets is $1369863.0137.