Question

Using the following balance sheet and income statement data, what is the debt to assets ratio?...

Using the following balance sheet and income statement data, what is the debt to assets ratio?

Current assets                     $  14,000                  Net income                      $ 21,000

The average common shares outstanding was 10,000.

Current liabilities                        8,000                  Stockholders’ equity            60,000

Total liabilities                          40,000

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Answer #1

Total Assets = Stockholder's equity + Total Liabilities

= $60,000 + $40,000

= $ 100,000

Debt to asset ratio = Total Debt / Total Assets *100

= $ 40,000 / $ 100,000 *100

= 40%

Answer = 40%

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