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    alleycataudit's Avatar
    alleycataudit Posts: 1, Reputation: 1
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    #1

    Sep 11, 2008, 07:53 AM
    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?
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
    Junior Member
    		  
    #2

    Sep 11, 2008, 03:48 PM
    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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