Question

On December 31, 2018, a company had assets of $29 billion and stockholders' equity of $22 billion. That same company had assets of $55 billion and stockholders' equity of $17 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $22 billion and total expenses of $20 billion. What is the company's debt-to-assets ratio on December 31, 2019

Answer 1

Answer:

0.69

Explanation:

From the question above on December 31, 2018 a company has an assets of $29 billion and stockholders equity of $22 billion.

On December 31, 2019 the same company recorded an assets of $55billion and stockholders equity of $17billion

Inorder to calculate the debt-to-assess ratio the first step is to find the amount of liabilities

Liabilities= Assets-Stockholders equity

Assets= $55 billion

Stockholders equity= $17 billion

= $55billion-$17billion

= $38 billion

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

Debt-to-assets ratio= Total liabilities/Total Assets

= $38 billion/ $55 billion

= 0.69

Hence on December 31, 3019 the debt-to-assets ratio is 0.69