Smith Corporation has a total debt ratio of 0.35. The company had additions to retained earnings of $600,000 for the year just ended, paid out $300,000 in cash dividends, and has an ending total equity of $5 million. Calculate its debt-equity ratio.

Smith Corporation has a total debt ratio of 0.35. The company had additions to retained earnings of $600,000 for the year just ended, paid out $300,000 in cash dividends, and has an ending total equity of $5 million. Calculate its debt-equity ratio.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Question

Financial accounting question

Smith Corporation has a total debt ratio of
0.35. The company had additions to retained
earnings of $600,000 for the year just ended,
paid out $300,000 in cash dividends, and has an
ending total equity of $5 million. Calculate its
debt-equity ratio.

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