Boulder Mountain Ski Company has total assets of $482,100,000 and a debt ratio of 0.25. Calculate the company’s debt-to-equity ratio. Round to two decimal places.
Total Liabilities |
Total Liabilities = Total Assets x Debt ratio |
Total Liabilities = $482,100,000 x 0.25 |
Total Liabilities = $120,525,000 |
Total Equity |
Total Equity = Total Assets - Total Liabilities |
Total Equity = $482,100,000 - $120,525,000 |
Total Equity = $361,575,000 |
Company’s debt-to-equity ratio |
Debt-to-equity ratio = Total Liabilities / Total Equity |
Debt-to-equity ratio = $120,525,000 / $361,575,000 |
Debt-to-equity ratio = 0.33 |
Therefore, the company’s debt-to-equity ratio will be 0.33 |
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