US CMA Part 2 · Chapter 1 · Question 10 of 15
Halden Corp. has total liabilities of $900,000 and total shareholders' equity of $1,200,000. What is its debt-to-equity ratio?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 0.75
Explanation
Debt-to-equity = total liabilities / total equity = $900,000 / $1,200,000 = 0.75. 0.43 is the debt-to-total-assets (debt) ratio, 1.33 is the inverse, and 0.57 is the equity ratio.
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