At the end of the year just completed, ABC Company's current liabilities totaled $75,000, and its long-term liabilities totaled $225,000. Working capital at year-end was $100,000. If the company's debt-to-equity ratio is 0.30 to 1, total long-term assets must equal:
Total liabilites = 75,000+225,000=300,000
Debt/equity = 0.30 to 1
Amount of equity is ...
The solution explains the calculation of long term assets given the debt to equity ratio.