Question

The Jeffer's company has a debt ratio (total debt to total assets) of 0.365. If their total debt is $500,000, what are their total assets?

Answer 1

Given:

Total debt ratio (total debt to total assets) = 0.365

Total debt = $500,000

To find:

The total assets.

Solution:

We know that,

$\text{Total debt ratio}=\dfrac{\text{Total debt}}{\text{Total assets}}$

On substituting the given values, we get

$0.365=\dfrac{500,000}{\text{Total assets}}$

$\text{Total assets}=\dfrac{500,000}{0.365}$

$\text{Total assets}=1369863.0137$

Therefore, the value of total assets is $1369863.0137.