Chapter 12, Problem 12.12SE

To determine

Debt to equity ratio: Debt to equity ratio is used to evaluate the relationship between the total liabilities and total equity of the company. Debt to equity ratio helps the company to determine the proportion of debt and equity. When the ratio is greater than 1, then it is higher and thus, company faces higher risk.

Debt to equity ratio is calculated by using the following formula:

$\text{Debt to equity}=\frac{\text{Total liabilities}}{\text{Total equity}}$

To calculate: Debt to equity ratio.