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