Calculate the total debt to total assets ratio. (Enter your response as a decima

Question

Calculate the total debt to total assets ratio. (Enter your response as a decimal rounded to 2 places.)

LOGIC COMPANY
Comparative Income Statement
For Years Ended December 31, 2016 and 2017 2017 2016 Gross sales $ 19,600 $ 15,450 Sales returns and allowances 1,000 100 Net sales $ 18,600 $ 15,350 Cost of merchandise (goods) sold 11,850 8,850 Gross profit $ 6,750 $ 6,500 Operating expenses: Depreciation $ 760 $ 630 Selling and administrative 2,650 2,300 Research 610 530 Miscellaneous 420 330 Total operating expenses $ 4,440 $ 3,790 Income before interest and taxes $ 2,310 $ 2,710 Interest expense 620 530 Income before taxes $ 1,690 $ 2,180 Provision for taxes 676 872 Net income $ 1,014 $ 1,308

Explanation / Answer

Total Debt to Total Assets Ratio = Total Liabilities / Total Assets

For 2016, Ratio = 33,600 / 67,300 = 0.50

For 2017, Ratio = 42,900 / 90,800 = 0.47

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