Asked by Kelsey Moses on Jun 18, 2024
Verified
May Cooperative has total assets of $456,000, current assets $133,000, total liabilities $263,000, and current liabilities 87,000. What is the debt to total assets ratio?
A) 24.33%
B) 19.08%
C) 197%
D) 57.68%
Debt to Assets Ratio
A financial ratio that indicates the percentage of a company's assets that are provided via debt.
Current Liabilities
Liabilities due within a short period, typically less than a year, that are supposed to be paid out of current assets.
- Assess the proportions of debt relative to overall assets and equity, recognizing their implications.
Verified Answer
AM
Amber McCauleyJun 22, 2024
Final Answer :
D
Explanation :
The debt to total assets ratio is calculated by dividing total liabilities by total assets. So, $263,000 / $456,000 = 0.5768 or 57.68%.
Learning Objectives
- Assess the proportions of debt relative to overall assets and equity, recognizing their implications.