calculate the debt to equity ratio for both Bahama Bay and Caribbean Key for the

Question

calculate the debt to equity ratio for both Bahama Bay and Caribbean Key for the most recent year

Selected financial data for Bahama Bay and Caribbean Key are as follows: in millions) Bahama Total assets Total liabilities Total stockholders' equity 2018 2017 2018 2017 9,843 S 9,582 $ 8,843 S 8,882 8,052 75167.4937.483 1.501 2,046 1,350 1,399 Sales revenue Interest expense Tax expense Net income $5,877 201 73 323 S 12,849 157 347 356 Required 1-a. Calcutate the debt to equity ratio for Bahama Bay and Caribbean Key for t

Explanation / Answer

Here, “equity” refers not to the value of stakeholders’ shares but rather to the difference between the total value of a corporation or individual’s assets and that corporation or individual’s liabilities. The formula for this form of the D/E ratio, then, can be represented as:

D/E = Total Liabilities / (Total Assets - Total Liabilities)

2018

Bahama:

Debt to Equity Ratio= Total Liabilities / Total Stockholder’s Equity= $ 8,052/$1,591=5.06

Caribbean:

Debt to Equity Ratio= = Total Liabilities / Total Stockholder’s Equity= $ 7,483/$1,399=5.35

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