The Debt to Total Assets Ratio Is Calculated by Dividing

question 29

Multiple Choice

The debt to total assets ratio is calculated by dividing

• A) total liabilities by total assets.
• B) long-term liabilities by total assets.
• C) current liabilities by total assets.
• D) total assets by total liabilities.

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Definitions:

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Stockholders' Claims

The rights of shareholders to a company's assets, often in the context of liquidation or dividend distributions.

Dividend Yield

A financial gauge showing the comparison between a company's annual dividend payments and its share price.

Cash Dividends

Payments made by a company to its shareholders out of its profits or reserves.