A company's debt ratio is computed as total assets minus total liabilities divided by total assets....

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A company's debt ratio is computed as total assets minus total liabilities divided by total assets....

A company's debt ratio is computed as total assets minus total liabilities divided by total assets. TRUE/ FALSE ??

business accounting

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Answer 1

Answer #1

The answer is FALSE
Debt ratio represents the ratio of capital financed through debt/loan

It is computed as Total Debt/Total Assets

Total Assets - Total Liabilities = Equity

and dividing it by Total Assets will give us Equity Ratio

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Answer 2

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