Question

At the end of the current year, Leer Company reported total liabilities of $315,000 and total equity of $115,000. The company's debt ratio on the last year-end was:

Answer 1

73.26%

Step-by-step explanation:

First, we need to determine the total assets.

Total assets = Total liabilities + equity

= $315,000 + $115,000

= $430,000

Debt ratio = Total liabilities / Total assets

= 315,000 / 430,000

= 73.26%

Therefore, the company's debt ratio on the last year end is 73.26%