Homework Answers
Answer is 0.44
Total Liabilities = Total Assets - Common Equity
Total Liabilities = $500,000 - $280,000
Total Liabilities = $220,000
Debt Ratio = Total Liabilities / Total Assets
Debt Ratio = $220,000 / $500,000
Debt Ratio = 0.44
So, debt ratio of the firm is 0.44
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