Asked by Michelle Carnes on Apr 25, 2024

The debt to assets ratio

A) is a solvency ratio.
B) is computed by dividing total assets by total debt.
C) measures the total assets provided by stockholders.
D) is a profitability ratio.

Debt To Assets Ratio

Measures the percentage of assets provided by creditors; computed by dividing total liabilities by total assets.

Total Assets

The combined value of everything a company owns, including cash, property, equipment, and inventory.

Total Debt

The sum of all liabilities, both current and long-term, that a company owes to creditors.

  • Get familiar with computing and interpreting the debt to assets ratio to assess a company's leverage and long-term solvency.