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Pitts Incorporated Owns a Chain of Retail Stores

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Pitts Incorporated owns a chain of retail stores. During December of 2009, a customer slipped in a doorway of its Nebraska store and broke his ribs. He is suing Pitts for $200,000 for negligence. The legal counsel of Pitts believes that it is remote that Pitts will lose its defense of the lawsuit because the doorway recently was rebuilt with all-weather traction stripping and a sign on the door warned customers that the doorway was slippery when icy. On December 30, 2009, before considering the effects of this lawsuit, The company's current assets, total assets, current liabilities, and total liabilities were $420,000, $840,000, $100,000, and $300,000, respectively. After this event is properly accounted for, calculate the company's debt/equity ratio on December 31, 2009.


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