Dreisen Traders has total debt of 1233837 and total assests

Dreisen Traders has total debt of $1,233,837 and total assests of $2,178,990. What are the firm\'s equity multiplier and debt to equity ratio. Round your final answer to two decimal places.

Solution

Total equity:

= $2,178,990-$1,233,837

= $945,153

Equity multiplier:

= Total assets/Total equity

= $2,178,990/$945,153

= 2.31 times

Debt to equity ratio:

= Total Debt/Total equity

= $1,233,837/$945,153

= 1.31 times