Which of the Following Is the Formula Used to Calculate

question 27

Multiple Choice

Which of the following is the formula used to calculate the debt ratio?

• A) Total Equity/Total Liabilities.
• B) Total Liabilities/Total Equity.
• C) Total Liabilities/Total Assets.
• D) Total Assets/Total Liabilities.
• E) Total Equity/Total Assets.

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Definitions:

Preferred Stock

Preferred stock is a class of shares that offers dividends and ownership in a company but typically does not confer voting rights, with dividends received before common shareholders.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate or instrument.

Net Income

The total profit or loss of a company after all revenues, costs, and expenses have been deducted, often referred to as the bottom line.

Earnings Per Share

A financial metric that shows the portion of a company's profit allocated to each outstanding share of common stock.