uestion 19 Previous Given the following Year 12 balance shee

uestion 19 Previous Given the following Year 12 balance sheet data for a footwear company: Balance Sheet Data Cash on Hand Total Current Assets Total Assets Overdraft Loan Payable 1-Year Bank Loan Payable Current Portion of Long-Term Loans Total Current Liabilities Long-Term Bank Loans Outstanding 10,000 70,000 280,000 5,000 10,000 17,000 48,000 90,000 Year 11 Year 12 Balance Change Shareholder Equity: Common Stock Additional Capital Retained Earnings 10,000 90,000 0 10,000 0 90,000 30,000 12,000 42,000 LTotal Shareholder Equity-130,000 +12.000 142,000 Based on the above figures and the formula for calculating the debt-assets ratio, the compan debt) is y\'s debt-assets ratio (where debt is defined to include both short-term and long-term O 0.436 : 0.321. C 0.382 0.418. 0.114

Solution

Computation of debt assets ratio:
Formula for debt assets ratio = total debt (i.e., short term + long term debt) / Total assets
= ($5,000 + 10,000 + 17,000 + 90,000) / 280,000
= 0.436 is the debt assets ratio