Gi Gi's Bakery Has Total Assets of $425 Million

question 161

Multiple Choice

Gi Gi's Bakery has total assets of $425 million.Its total liabilities are $110 million.Its equity is $315 million.Calculate the debt ratio.

• A)38.6%.
• B)13.4%.
• C)34.9%.
• D)25.9%.
• E)14.9%.

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Definitions:

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific date, showing assets, liabilities, and shareholders’ equity.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business.

Periodic Inventory System

An accounting method where inventory values and cost of goods sold are determined at the end of an accounting period.

Merchandise Inventory

refers to the goods available for sale to customers in the retail and wholesale industries.