Charger Company's most recent balance sheet reports total assets of $31,347,000, total liabilities of $18,447,000 and total equity of $12,900,000. The debt to equity ratio for the period is (rounded to two decimals) :

Question

Bryan Hunt

Business

12 November, 11:05

Charger Company's most recent balance sheet reports total assets of $31,347,000, total liabilities of $18,447,000 and total equity of $12,900,000. The debt to equity ratio for the period is (rounded to two decimals) :

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Bradley Novak · Answer 1

In accounting, the debt-to-equity ratio is also the liability-to equity ratio. To get this ratio, you just have to divide the amount of liabilities by the amount of equity. Therefore,

DTE ratio = $18,447,000 / $12,900,000

DET ratio = 1.43

The DET ratio is used to determine the company's leverage. A DET ratio>1 would mean that the company has more debt than assets, which is unsatisfactory.