Chapter 15, Problem 12CR

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Write the formulas for the debt-to-assets ratio and return on investment. (15-7)

To determine

The formula for calculating debt to assets ratio and return on investment.

Explanation

The formula to compute debt to assets ratio is:

For example:

Consider that total assets of

Compute the debt to assets ratio:

Substitute

Therefore,

Hence, debt to assets ratio is

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