The debt-to-total assets ratio is primarily a measure of

Solutions

Expert Solution

Ans:

The Debt to Total Assets ratio is measure of Total debt to Total Assets i.e How much company has the debt liability from total assets, i.e ratio of assets procured from the Debts

Debts is a liability which is compulsorily need to paid off on due time with interest or without interest

Equity is a Owners investment which may be paid when earnings are available in the form of dividends or share of investment in case of liquidation or winding up

It help the investors and creditors and lenders to understand the repayment capability by analysing the repayments such as Principle and interest or EMI to be made compulsorily from the income so that the creditors or lenders can able to analyse themselves, how much debt can be provided to the company in the form of loans and debts and also rate of interest to be charged based on liquidity and security of the Company

Hope this helped ! Let me know in case of any queries.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

SOLVENCY RATIOS Debt ratio for Walgreens = Total Liabilities / Total assets Debt ratio for Walgreens...

SOLVENCY RATIOS Debt ratio for Walgreens = Total Liabilities / Total assets Debt ratio for Walgreens 2018 = $68,124 / $68,124 = 1 Debt ratio for Walgreens 2017 = $66,009 / $66,009 = 1 Debt ratio for CVS Debt ratio for CVS 2018 = $196,456 / $196,456 = 1 Debt ratio for CVS 2017 = $95,131 / $95,131 = 1 What do the results of this ratio mean in the context of Walgreens? How about CVS? Compare the two -...

1. Quick Ratio= current assets-inventories/ current liabilities 2. Debt to Assets ratio= total debt/total assets 3....

1. Quick Ratio= current assets-inventories/ current liabilities 2. Debt to Assets ratio= total debt/total assets 3. Earnings Per Share (EPS)=total earnings/outstanding shares (must first solve net income-preferred divideneds= total earnings) 4. Net Income (Net profit)=total revenues-total expenses I need help finding the answer to these equations for Target Corporation for 2015 and 2016. please refer to the links for the 10k reports for the company. 2015- https://corporate.target.com/_media/TargetCorp/annualreports/2015/pdfs/Target-2015-Annual-Report.pdf 2016- https://corporate.target.com/_media/TargetCorp/annualreports/2016/pdfs/Target-2016-Annual-Report.pdf?ext=.pdf

Please find the following ratio for Southwest Airlines Debt ratio = total debt/total assets Indicates what...

Please find the following ratio for Southwest Airlines Debt ratio = total debt/total assets Indicates what percentage of an organizations assets are financed by debt

Company has debt-to-total assets ratio is 0.4. What is its debt to equity ratio

create your own example of the Debt Utilization Ratio of debt to total assets ratio. You...

create your own example of the Debt Utilization Ratio of debt to total assets ratio. You answer should result in a percentage. Also, distinguish the difference between Revenue and net income and give the four steps of the Accounting Cycle.

Gates Appliances has a return-on-assets (investment) ratio of 22 percent. a. If the debt-to-total-assets ratio...

Gates Appliances has a return-on-assets (investment) ratio of 22 percent. a. If the debt-to-total-assets ratio is 50 percent, what is the return on equity?

What is the debt to total assets ratio and what is it used for? What is...

What is the debt to total assets ratio and what is it used for? What is a current asset? Where do you typically see an asset and what is it used for? What is the gross margin ratio and what is it used for? How do you calculate this ratio? Compare and contrast your answers. What similarities and differences do you see?

Which of the following statements about the total debt to total assets ratio is NOT true?...

Which of the following statements about the total debt to total assets ratio is NOT true? The debt ratio is calculated by dividing a company's total liability by its total assets. "The higher the total debt to total asset ratio, the greater the financial risk." "If a company's debt to asset ratio is less than 0.5, most of its assets are financed through debt." A highly leveraged company could be in danger if its creditors demand repayment.

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25,...

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25, and a profit margin of 10%. The Board of Directors is unhappy with the current return on equity (ROE), and they think it could be doubled. This could be accomplished (1) by increasing the profit margin to 12% and (2) by increasing debt utilization. Total assets turnover will not change. What new debt ratio, along with the new 12% profit margin, would be required...

Sales were $1,840,000, the total debt ratio was .37, and total debt was $673,000. What is the return on assets (ROA)?

Return on Assets A fire has destroyed a large percentage of the financial records of the Excandesco Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 12.9 percent. Sales were $1,840,000, the total debt ratio was .37, and total debt was $673,000. What is the return on assets (ROA)?Return on Equity12.90%Sales$ 1,840,000.00Total Debt Ratio 0.37Total Debt$ 673,000.00Return on Assets03.41 Growth and Assets A firm...

Subjects