Using the Following Balance Sheet and Income Statement Data, What

question 98

Multiple Choice

Using the following balance sheet and income statement data, what is the debt to assets ratio? $$\begin{array} { l c l l } \text { Current assets } & \$ 32,000 & \text { Net income } & \$ 42,000 \\\text { Current liabilities } & 16,000 & \text { Stockholders' equity } & 78,000 \\\text { Average assets } & 160,000 & \text { Total liabilities } & 42,000 \\\text { Total assets } & 120,000 & & \\\text { Average common shares outstanding was } 15,000 .\end{array}$$

• A)26 percent
• B)13 percent
• C)65 percent
• D)35 percent

---

Definitions:

Discount Rate

The interest rate used to discount future cash flows to present value in various financial models.

Cash Inflows

The total amount of money received by a company or project, from various sources including operations, investments, and financing.

Purchase Price

The cost paid to acquire a good or service, including initial acquisition costs and any associated transaction fees.

Estimated Useful Life

The expected time period during which an asset is likely to be functional and economically useful.