Asked by Jenna Grace Milionis on May 20, 2024
Verified
Refer to the following selected financial information from Winterfell Company.Compute the company's debt to equity for Year 2. 
A) 0.9.
B) 1.1.
C) 0.5.
D) 1.9.
E) 2.1.
Debt to Equity
A financial metric that shows the comparative amount of debt and shareholders' equity utilized to fund a company's assets.
Financial Information
Reports and metrics detailing the economic status and performance of a company or individual.
- Learn to evaluate critical financial ratios, namely debt-to-equity, equity ratio, debt ratio, and times interest earned.
Verified Answer
NA
Nakia AdamsMay 21, 2024
Final Answer :
B
Explanation :
Debt to Equity = Total Liabilities / Total Equity
For Year 2:
Total Liabilities = 360,000
Total Equity = 320,000
Debt to Equity = 360,000 / 320,000 = 1.125 or 1.1 rounded to one decimal place
Therefore, the company's debt to equity for Year 2 is 1.1.
For Year 2:
Total Liabilities = 360,000
Total Equity = 320,000
Debt to Equity = 360,000 / 320,000 = 1.125 or 1.1 rounded to one decimal place
Therefore, the company's debt to equity for Year 2 is 1.1.
Learning Objectives
- Learn to evaluate critical financial ratios, namely debt-to-equity, equity ratio, debt ratio, and times interest earned.
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