ryandaleburk1x ryandaleburk1x
  • 16-01-2021
  • Business
contestada

5 million in total liabilities 4 million dollars in the balance sheet net worth Calculate the debt to worth ratio

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Samawati
Samawati Samawati
  • 17-01-2021

Answer:

1.25

Explanation:

The net worth ratio uses data from the balance sheet to compare the level of a company's debt against its total net worth.

The formula for calculating the debt to net worth ratio is as below.

Debt to networth ratio = Total debts/ Total net worth.

Liabilities are the debts of a business.

in this case, = 5,000,000 / 4,000,000

Debt to net worth ration= 5/4

=1.25

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