Question

Given the following information, calculate the debt ratio percentage:

Liabilities = $24,500
Liquid assets = $4,900
Monthly credit payments = $800
Monthly savings = $760
Net worth = $72,500
Current liabilities = $1,600
Take-home pay = $2,300
Gross income = $3,500
Monthly expenses = $-2,040

Answer 1

To calculate the debt ratio percentage, the total assets are assumed to be the sum of net worth and liabilities, which equals $97,000. The debt ratio percentage is then found by dividing total liabilities by total assets and multiplying by 100, which yields 25.26%.

Step-by-step explanation:

To calculate the debt ratio percentage, we need total liabilities and total assets. In this case, we'll use the information provided to calculate these figures. Since no total assets figure is directly given, we assume the net worth and liabilities together represent the total assets according to the accounting equation (Assets = Liabilities + Equity).

Using the information provided for another bank as a reference:

• Assets include reserves ($50), government bonds ($70), and loans ($500).
• Liabilities are the deposits ($400).
• Net worth, or equity, is the difference between total assets and total liabilities.

For the original question:

• Total Assets = Net Worth + Liabilities = $72,500 + $24,500 = $97,000.
• Debt Ratio % = (Total Liabilities / Total Assets) * 100 = ($24,500 / $97,000) * 100.

Total Assets = $97,000.
Debt Ratio % = (24,500 / 97,000) * 100 = 25.26%.