The following balance sheet information is provided for San Juan Company for 201

Question

The following balance sheet information is provided for San Juan Company for 2014:
  

    
What is the company's debt to equity ratio? (Round your final answer to 2 decimal places.)

140.10%

71.38%

34.40%

36.98%

  Assets    Cash $ 5,250    Accounts receivable 6,550    Inventory 10,850     Prepaid expenses 3,100    Plant and equipment, net of depreciation 17,100    Land 12,300   Total assets $ 55,150   Liabilities and Stockholders' Equity    Accounts payable $ 2,730    Salaries payable 8,340    Bonds payable (Due in 2020) 11,900    Common stock, no par 17,200    Retained earnings 14,980   Total liabilities and stockholders' equity $ 55,150

Explanation / Answer

Debt to equity ratio=Total debt/Total equity

=(Accounts payable+Salary payable+Bonds payable)/(Common stock+Retained earnings)

=(2730+8340+11900)/(17200+14980)

which is equal to

=71.38%(Approx).

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