Answer:
LotsofDebt, Inc Debt Ratio is 93.75%
LotsofEquity, Inc Debt Ratio is 6.25%
equity multiplier LotsofDebt, Inc is 16
equity multiplier LotsofEquity, Inc is 1.0666666667
debt-to-equity LotsofDebt, Inc is $15 million
debt-to-equity LotsofEquity, Inc. is $0.0666666667 million
Step-by-step explanation:
In order to calculate the debt ratio of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:
Debt Ratio = Debt/Assets
According to the given data we have the following:
LotsofDebt, Inc Debt=$30 million
LotsofDebt, Inc Asset=Debt + Equity = $30 million + $2 million = $32 million
Therefore, LotsofDebt, Inc Debt Ratio =$30 million/$ 32 million
LotsofDebt, Inc Debt Ratio= 93.75%
LotsofEquity, Inc. Debt=$2 million
LotsofEquity, Inc Asset= Debt + Equity = $2 million + $30 million
LotsofEquity, Inc Debt Ratio = $2 million/$32 million
LotsofEquity, Inc Debt Ratio = 6.25%
In order to calculate the equity multiplier of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:
equity multiplier =Assets/Equity
equity multiplier LotsofDebt, Inc.=$32 million/$2 million
equity multiplier LotsofDebt, Inc= 16
equity multiplier LotsofEquity, Inc=$32 million/$30 million
equity multiplier LotsofEquity, Inc = 1.0666666667
In order to calculate the debt-to-equity of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:
debt-to-equity LotsofDebt, Inc=Debt/Equity
debt-to-equity LotsofDebt, Inc=$30 million/$2 million
debt-to-equity LotsofDebt, Inc= $15 million
debt-to-equity LotsofEquity, Inc.= $2 million/$30 million = 0.0666666667
debt-to-equity LotsofEquity, Inc.= $0.0666666667 million
