er 10 Qulz Question 1 (of 7) value: 0.71 points MC Qu. 180 On December 31, 2015,

Question

er 10 Qulz Question 1 (of 7) value: 0.71 points MC Qu. 180 On December 31, 2015, a company.. On December 31, 2015, a company had assets of $32 billion and stockholders' equity of $27 bililion. That same company had assets of $52 bitilion and stockholders equity of $14 bilion as of December 31, 2016 During 2016, the company reported total sales revenue of $25 biltion and total expenses of $23 billon. What is the company's debt-to-assets ratio on December 31, 2016? O 073 0044 O 0046 References Multiple Choice MCOu 180 On De e here to sea ICi

Explanation / Answer

Debt to asset ratio = Total debt / Total asstes of the company

For dec 31, 2016:

Total assets = $52.00 bn

Total Debt = Assets - (equity including reserves) = 52-(14) = 38bn

Since the year end value of equity is given , it must be after the year's net profit has been recorded in equity capital.

Debt to asset ratio = 38/52 = 0.73

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