a-company-has-total-liabilities-of-500000-and-total-equity-of-250000-what-is-the

Question

A company has total liabilities of $500,000 and total equity of $250,000. What is the debt to equity ratio, and what does it indicate about the company's leverage?

Accepted Answer

2.0, indicating the company relies more on debt than equity.

Answer

1.0, indicating equal reliance on debt and equity.

Answer

0.5, indicating the company relies more on equity than debt.

Answer

3.0, indicating the company is highly leveraged.

A company has total liabilities of \$500,000 and total equity of \$250,000. What is the debt to equity ratio, and what does it indicate about the company's leverage?