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9 October, 10:03

On December 31, 2018, a company had assets of $29 billion and stockholders' equity of $22 billion. That same company had assets of $55 billion and stockholders' equity of $17 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $22 billion and total expenses of $20 billion. What is the company's debt-to-assets ratio on December 31, 2019

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  1. 9 October, 12:12
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    0.69

    Explanation:

    From the question above on December 31, 2018 a company has an assets of $29 billion and stockholders equity of $22 billion.

    On December 31, 2019 the same company recorded an assets of $55billion and stockholders equity of $17billion

    Inorder to calculate the debt-to-assess ratio the first step is to find the amount of liabilities

    Liabilities = Assets-Stockholders equity

    Assets = $55 billion

    Stockholders equity = $17 billion

    = $55billion-$17billion

    = $38 billion

    Therefore, the debt-to-assets ratio can be calculated as follows

    Debt-to-assets ratio = Total liabilities/Total Assets

    = $38 billion / $55 billion

    = 0.69

    Hence on December 31, 3019 the debt-to-assets ratio is 0.69
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