Question

11. The year end balance sheet of Ultimate Medical Center show total liabilities of $5,000,000, which includes a loan to expand services. Net worth at the balance sheet date was $ 4,000,000. Calculate the debt-to-worth ratio. Using the information above calculate the number the debt to worth ratio assuming the operating revenues exceed operating by 300000

Answer 1

Answer:0.94

Explanation: It's stating to assume that the operating revenues which is 4,000,000 is more than the expenses which is 5,000,000. so we are going to PRETEND that the 4,000,000 is 5,300,000 and the expenses stay the same which is 5,000,000. So you divide 5,000,000 by 5,300,000 which gives you the ratio of 0.94