Question

In business, the formula for debt ratio is Debt Ratio = Total Liabilities/Total Assets. A bakery has total assets of $465 million. Its total liabilities are $130 million. Calculate the debt ratio in simplest form

Answer 1

Answer:

0.2796

Step-by-step explanation:

We have the formula, Debt ratio = Total liabilities / Total Assets.

or, DR= TL/TA.

It is given that a bakery has total assets of 465 Dollars.

So, TA= $465

And the bakery has total liabilities of 130 Dollars.

So, TL=$130

Therefore, the Debt Ratio (DR) of the bakery will be (Total liabilities / Total Assets)

= TL / TA

=130/465

=26/93

=0.2796 (Answer)