QuestionAugust 16, 2025

Knowledge Check 01 A company has total assets of 150,000 total liabilities of 50,000 and total equity of 100,000 What is this company's debt-to-equity ratio? Company's debt-to-equity ratio square

Knowledge Check 01 A company has total assets of 150,000 total liabilities of 50,000 and total equity of 100,000 What is this company's debt-to-equity ratio? Company's debt-to-equity ratio square
Knowledge Check 01 A company has total assets of 150,000 total liabilities of 50,000 and total equity of 100,000 What is this company's debt-to-equity ratio? Company's debt-to-equity ratio square

Solution
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Answer

0.5 Explanation 1. Identify the Formula The debt-to-equity ratio is calculated using the formula: **Debt-to-Equity Ratio = \frac{\text{Total Liabilities}}{\text{Total Equity}}**. 2. Plug in the Values Total Liabilities = \50,000 and Total Equity = \100,000. Substitute these values into the formula: **\frac{50,000}{100,000}**. 3. Calculate the Ratio Simplify the fraction: **\frac{50,000}{100,000} = 0.5**.

Explanation

1. Identify the Formula<br /> The debt-to-equity ratio is calculated using the formula: **Debt-to-Equity Ratio = \frac{\text{Total Liabilities}}{\text{Total Equity}}**.<br /><br />2. Plug in the Values<br /> Total Liabilities = \$50,000 and Total Equity = \$100,000. Substitute these values into the formula: **\frac{50,000}{100,000}**.<br /><br />3. Calculate the Ratio<br /> Simplify the fraction: **\frac{50,000}{100,000} = 0.5**.
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