The formula is given as: Debt Ratio = Total Liabilities / Total Assets.
You are told the assets are 465 million and liabilities is 130 million.
Putting the given numbers in the formula you have:
Debt Ratio = 130/465
Simplify by dividing both numbers by 5:
130/465 = 26/93
Answer:
[tex]\text{Debt ratio}=\frac{26}{93}[/tex]
Step-by-step explanation:
We have been given the formula for debt ratio. We are asked to find the debt ratio for bakery whose total assets are $465 million and total liabilities are $130 million.
[tex]\text{Debt ratio}=\frac{\text{Total liabilities}}{\text{Total assets}}[/tex]
Substitute the given values:
[tex]\text{Debt ratio}=\frac{130}{465}[/tex]
[tex]\text{Debt ratio}=\frac{26\cdot 5}{93\cdot 5}[/tex]
[tex]\text{Debt ratio}=\frac{26}{93}[/tex]
Therefore, the required debt ratio in simplest form would be [tex]\frac{26}{93}[/tex].
