Answer:
The answer is 0.4
Explanation:
The formula for total debt ratio is total debt ÷ total assets.
Total debt equals current debt plus total long-term debt.
To find total debt(liability), remember Asset = Liability + Equity.
Therefore, Liability (debt) will be Asset - equity
$1,123,900 - $679,400
Total debt(liability) = $444,500
So, total debt ratio will be:
$444,500/$1,123,900
=0.4
This ratio means 0.4 or 40 percent of the company asset is financed by debt.
