Debt-to-Equity Ratio The following financial data is from Hi-Tech Instruments\'

Question

Debt-to-Equity Ratio
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)

(Thousands of Dollars)

Calculate the company's debt-to-equity ratio for 2016.

Round answer to two decimal places.

Answer

Compare the result to the industry average.

Hi-Tech Instruments' ratio is higher than the industry average.

Hi-Tech Instruments' ratio is lower than the industry average.

2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 16,300 Dividends 2,600 Earnings per share 8.15

Explanation / Answer

Debt-to-equity ratio=Total liabilities /Total stockholders' equity = 77000/95000= 0.81 Hi-Tech Instruments' ratio is higher than the industry average.

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