A Company Has Assets of $350,000 and Total Liabilities of $200,000

question 189

True/False

A company has assets of $350,000 and total liabilities of $200,000. Its debt-to-equity ratio is 0.6.
If total assets and total liabilities are $350,000 and $200,000, respectively, stockholders' equity must be $150,000. Thus, the debt-to-equity ratio is $200,000/$150,000 or 1.3.

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Definitions:

Soviet Union

A former federation of communist republics that existed from 1922 to 1991, officially known as the Union of Soviet Socialist Republics (USSR).

U.S. Economy

The economic system of the United States, characterized by a mixed economy with a high level of output, technological innovation, and a diverse industrial base.

Efficiency

The optimal use and allocation of resources to produce the maximum amount of goods and services with minimal waste.

Equity

The concept of fairness in economics, typically referring to ownership interest in a company or property, or the idea of justice in distribution of wealth or resources.