A Company Reports Total Assets of $900,000 and Shareholders' Equity

question 80

Multiple Choice

A company reports total assets of $900,000 and shareholders' equity of $600,000.Calculate the debt ratio.

• A)33.33%
• B)50%
• C)66.67%
• D)40%

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Definitions:

Inventory Write-Downs

An accounting process of reducing the cost of inventory that has declined in value below its original cost.

Net Profit Margin Ratio

A profitability measure that calculates the percentage of net income derived from total revenues.

Operating Expenses

Operating expenses encompass the costs associated with running the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Net Profit Margin

A financial metric that shows the percentage of profit derived from revenue after all expenses are deducted.