A Company Had Total Assets of $350,000 and Total Liabilities

question 181

Essay

A company had total assets of $350,000 and total liabilities of $101,500 and total equity of $248,500. Calculate its debt ratio.

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Definitions:

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase cost.

Cash-Equivalent Value

The value of an asset that is easily convertible into a known amount of cash with minimal risk of change in value.

Business Activities

Operations, actions, and tasks that a company engages in as part of its economic operations, including production, sales, marketing, and finance.

Resources

Assets, materials, and inputs used by an organization to produce goods or services.