Question

Using the following balance sheet and income statement data, what is the debt to assets ratio? Current assets $14,000 Net income $ 21,000 Current liabilities 8,000 Stockholder's Equity 39,000 Average assets 80,000 Total liabilities 21,000 Total assets 60,000 Average common shares outstanding was 10,000.

Answer 1

35%

Step-by-step explanation:

The following information were derived from a balance sheet and income statement data

Current assets is $14,000

Net income is $21,000

Current liabilities is 8,000

Stock holders equity is 39,000

Average assets is 80,000

Total liabilities is 21,000

Total assets is 60,000

Therefore, the debt to assets ratio can be calculated as follows

= Total liabilities/Total assets

= 21,000/60,000

= 0.35×100

= 35%

Hence the debt to assets ratio is 35%