The Debt to Total Assets Ratio Is Computed by Dividing

question 133

Multiple Choice

The debt to total assets ratio is computed by dividing:

• A) total assets by long-term liabilities.
• B) total assets by total debt.
• C) total debt by total assets.
• D) long-term liabilities by total assets.

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Definitions:

Investment Center

A division or unit within an organization that is directly responsible for generating its own revenue as well as controlling its costs, and therefore, its profits.

Authority

The ability or entitlement to dictate actions, decide on matters, and demand adherence.

Decision

The act of making a choice or coming to a conclusion.

Investment Turnover

A financial ratio that measures how effectively a company uses its assets to generate sales revenue; a higher turnover indicates better performance.