Answer:
1.25
Explanation:
The net worth ratio uses data from the balance sheet to compare the level of a company's debt against its total net worth.
The formula for calculating the debt to net worth ratio is as below.
Debt to networth ratio = Total debts/ Total net worth.
Liabilities are the debts of a business.
in this case, = 5,000,000 / 4,000,000
Debt to net worth ration= 5/4
=1.25
