Question

Debt Management Ratios Trina's Trikes, Inc. reported a debt-to-equity ratio of 1.83 times at the end of 2008. If the firm's total debt at year-end was $9.20 million, how much equity does Trina's Trikes have?

Answer 1

Answer:

Trina's Trikes have equity of 5.03 million

Explanation:

Debt to equity ratio is the rate of debt as compared to equity of the firm.

We can calculate the amount of equity by using formula of debt to equity

Debt to equity = Total Debt / Total equity

1.83  = 9.2 million / Total equity

Total Equity = 9.2 million / 1.83

Total Equity = 5.03 million