Chapter 15, Problem 12CR

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

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:

Debt to assets ratio=Total liabilitiesTotal assets

For example:

Consider that total assets of $2,875,000, total liabilities of$2,189,100.

Compute the debt to assets ratio:

Substitute $2,189,100 for total liabilities, and$2,875,000 for total assets in the formula,

Debt to assets ratio=Total liabilitiesTotal assets

Therefore,

Debt to assets ratio=Total liabilitiesTotal assets=$2,189,100$2,875,000=0.76=0.76:1

Hence, debt to assets ratio is 0

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