Question

A company has the following information. What is the financial leverage ratio? Total assets $736,000 Total liabilities 314,000 Interest expense 9,400

Answer 1

1.7441

Step-by-step explanation:

Calculation to determine financial leverage ratio

Using this formula

Financial leverage ratio=Total assets/(Total assets-Total liabilities)

Let plug in the formula

Financial leverage ratio=736,000/(736,000 - 314,000)

Financial leverage ratio= 1.7441

Therefore the financial leverage ratio is 1.7441