SRC has a debt ratio of .4, current liabilities of $18,000, and total assets of $100, [Archive]

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luvlearning

Sep 4, 2011, 12:59 PM

SRC has a debt ratio of .4, current liabilities of $18,000, and total assets of $100,000. What is the level of SRC's total liabilities?

pready

Sep 4, 2011, 02:24 PM

Debt ratio is equal to Liabilities divided by Assets. In formula form:
Debt Ratio = Liabilities/Assets

Therefore:
.4 = X / 100,000

Now you just need to solve for X, where X = total Liabilities