Asked by Esmeralda Pimentel on May 30, 2024
Verified
Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:
A) 0.29
B) 3.47
C) 0.22
D) 0.78
Debt-to-Equity Ratio
A financial ratio used to measure the relative proportion of shareholders' equity and debt used to finance a company's assets.
- Study different financial ratios, including total asset turnover, the debt-to-equity ratio, and the equity multiplier.
Verified Answer
ÑB
Ñàñà bù??ë?Jun 04, 2024
Final Answer :
B
Explanation :
The debt-to-equity ratio is calculated by dividing the total liabilities by the total shareholders' equity. In this case, the total liabilities are $20,610,000 and the total shareholders' equity is $5,946,000. Thus, the debt-to-equity ratio is 20,610,000 / 5,946,000, which simplifies to approximately 3.47. Therefore, the closest answer is B, 3.47.
Learning Objectives
- Study different financial ratios, including total asset turnover, the debt-to-equity ratio, and the equity multiplier.
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