In: Finance
Gutweed, Inc. has total equity of $133,000 and total assets of $225,000. What is the debt-equity ratio?
0.97  | ||
0.82  | ||
0.69  | ||
0.76  | 
Fennel, Inc. has inventory of $2,200, current liabilities of $3,100, cash of $1,900, and accounts receivable of $3,900. What is the cash ratio?
0.45  | ||
0.61  | ||
0.72  | ||
0.53  | 
Question 1)
Debt equity = debt/equity
given equity is 133000
Total assets is 225000
Debt = Total assets - equity
= (225000-133000)/133000 = 0.69
Question 2)
Cash ratio is = Cash and cash equivalents /current liabilties
= 1900/3100 = 0.61