Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:

A) 0.29
B) 3.47
C) 0.22
D) 0.78

Question

Shipley Corporation has provided the following data from its most recent balance sheet:   The debt-to-equity ratio is closest to:A) 0.29B) 3.47C) 0.22D) 0.78

dennis palicte · Accepted Answer

Final Answer : B, Explanation :  The debt-to-equity ratio is calculated by dividing total liabilities by total equity.Debt-to-equity ratio = Total liabilities / Total equityDebt-to-equity ratio = $8,440,000 / $2,430,000Debt-to-equity ratio = 3.47Therefore, the debt-to-equity ratio is closest to 3.47, which corresponds to answer choice (B). Debt-to-equity ratio = Total liabilities ÷ Stockholders' equity= $590,000 ÷ $170,000 = 3.47

Shipley Corporation has provided the following data from its most recent balance sheet: The debt-to-equity ratio is closest to:

A) 0.29
B) 3.47
C) 0.22
D) 0.78

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