Kerwin Holdings Has Total Assets of $450,000 and Shareholders' Equity

question 31

Multiple Choice

Kerwin Holdings has total assets of $450,000 and shareholders' equity of $120,000, of which $45,000 of the equity is common stock.How much is the company's debt-to-equity ratio?

• A)3.75
• B)2.75
• C)6.00
• D)4.40

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Definitions:

Lifo Inventory

A method of inventory valuation where the last items placed into inventory are the first ones taken out, used to calculate the cost of goods sold and ending inventory.

Basic Earnings Per Share (Eps)

Basic Earnings Per Share (EPS) is a calculation used to gauge a company's profitability on a per-share basis, dividing net earnings available to common shareholders by the average outstanding shares.

Net Income

The remaining income of a company after deducting expenses and taxes from the total income generated.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a dataset, often used in accounting and inventory valuation.