A Company Reports Total Assets of $850,000 and Stockholders' Equity

question 92

Multiple Choice

A company reports total assets of $850,000 and stockholders' equity of $500,000. Calculate the debt ratio.

• A)39.75%
• B)41.18%
• C)58.23%
• D)40.00%

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Definitions:

Negotiable Instrument

A formal paper assuring the disbursement of a specified amount of funds, which could be paid either immediately when requested or at a scheduled time, with the document identifying the payor.

Demand Instrument

A type of draft that allows the payee to demand payment at any time from a holder.

Overdue

Pertaining to something that has not been completed, paid, or returned by its expected or agreed-upon deadline.

Liability

The legal responsibility to settle a debt or compensate for harm caused to someone else, often resulting from actions or negligence.