The Formula for Calculating the Debt Ratio Is

question 148

Multiple Choice

The formula for calculating the debt ratio is

• A)total liabilities divided by total assets.
• B)long-term liabilities divided by total assets.
• C)Total liabilities divided by total liabilities and stockholders' equity.
• D)total debt divided by total stockholders' equity.

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Definitions:

Sale of Equipment

a transaction where a business disposes of machinery or equipment, typically recorded as an incoming cash flow or gain/loss in financial statements.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for financial statements.

Direct Method

A cash flow statement presentation method that shows actual cash flows from operating activities, detailing specific sources and uses of cash, as opposed to the indirect method which adjusts net income for non-cash transactions.

Dividends

Regular payments made by a corporation to its shareholders out of its profits or reserves.