Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Financial Statement Analysis

Ratios: Debt to Asset Ratio

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Ratios: Debt to Asset Ratio

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Problem

On its December 31 balance sheet, XYZ Company reported total assets of $880,000 and total equity of $320,000. What is the company’s debt ratio?

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Problem

At the beginning of the year, ABC Company had total assets of $600,000, Total Liabilities of $360,000, and Total Equity of $240,000. At the end of the year, total assets had increased to $800,000, Total Liabilities decreased to $320,000 and Total Equity increased to $480,000. What was the change in the company’s debt ratio during the year?