Question

In: Accounting

Payne Corporation has the following accounts as of December 31, 2018:

Payne Corporation has the following accounts as of December 31, 2018:

Total Assets $ 60,000

Total Liabilities 20,000

Total Equity 40,000

Compute the debt to equity ratio at December 31, 2018.

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Expert Solution

 

Step 1: Definition of dent-equity ratio

The relationship between total liabilities and total equity is the debt to equity ratio.

Step 2: Debt-Equity ratio

The company's debt-equity ratio is calculated by dividing the liabilities by equity. The debt equity rqatio shows the relationship between the debt and the equity.

 

The debt-equity ratio of the Payne Corporation is 0.5:1

Sahil Dangi answered 2 years ago
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