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-   -   How to figure total debt (https://www.askmehelpdesk.com/showthread.php?t=259257)

  • Sep 11, 2008, 07:53 AM
    alleycataudit
    How to figure total debt
    If one knows asset turnover, debt to equity ratio, and sales, what is the formula to calculate total debt?
    Sales = $4,500,000
    Asset Turnover = 5X's
    Debt to equity = 60%
    What is the total debt?
  • Sep 11, 2008, 03:48 PM
    MLSNC
    Asset turnover = Sales/Total assets = 4,500,000/a = 5x. This would yield a = 900,000.

    Since assets = liabilities and equity, you would have 900,000=60%eq + eq.

    Now all you have to do is solve for eq.

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