Claudia Ltd's statement of financial position is shown below.
The above balances include a receivable from Jeremy Ltd for an amount of $100,000 and a payable to Jeremy Ltd for $50,000. A debt contract with ABC Bank signed by Claudia Ltd requires a debt equity ratio of no more than 50%.
Assuming a right to set-off exists with Jeremy Ltd, what is the debt to equity ratio of Claudia Ltd?
Definitions:
Economy's Capacity
The maximum level of output that an economy can produce without leading to inflation, utilizing its available resources efficiently.
Opportunity Cost
The price paid for not selecting the next most favorable alternative during decision-making.
Attending College
Attending College refers to the act of enrolling in and attending an institution of higher education in pursuit of a degree or certificate.
Most Valued Opportunity
Refers to the highest ranked alternative forfeited when a particular decision is made, also known as the opportunity cost.
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