Question

The debt-to-equity ratio for your small business was 1.40 at the end of last year and 1.25 at the end of this year. Your debt-to-equity ratio is:_________

Answer 1

Answer:

debt-to-equity ratio is 1.33 .

Explanation:

Given the debt equity ratio at the beginning and at end of the year, we can estimate the debt equity ratio of a company as the average of the two.

Average debt-to-equity ratio = (1.40 + 1.25) ÷ 2

                                                = 1.325 or 1.33