A company has a debt-to-equity ratio of 1.5. Which of the following statements is true? The company has more liabilities than assets The company's total equity is equal to 1.5 times its total liabilities The company has more equity than liabilities None are true
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
A company has a debt-to-equity ratio of 1.5. Which of the following statements is true?
The company has more liabilities than assets
The company's total equity is equal to 1.5 times its total liabilities
The company has more equity than liabilities
None are true
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