Question

Rajan Company's most recent balance sheet reported total assets of $1.76 million, total liabilities of $0.87 million, and total equity of $0.89 million. Its Debt to equity ratio is:
a) 0.494
b) 0.506
c) 1.02
d) 1.00
e) 0.978

Answer 1

Answer:

Debt to equity = 0.978

so correct option is e) 0.978

Explanation:

given data

total assets = $1.76 million

total liabilities = $0.87 million

total equity = $0.89 million

solution

we get here Debt to equity that is express here as

Debt to equity = Total liabilities ÷ Total equity    ......................1

put here value we get debt to equity that is

Debt to equity = $\frac{0.87million}{0.89million}$

Debt to equity = 0.978

so correct option is e) 0.978