Becker Ltd has the following balance sheet figuresTotal assets = $500,000Total liabilities = $150,000Share capital and reserves = $350,000What is the equity ratio?Group of answer choices60%70%43%30%
Question
Becker Ltd has the following balance sheet figuresTotal assets = 150,000Share capital and reserves = $350,000What is the equity ratio?Group of answer choices60%70%43%30%
Solution
The equity ratio is calculated by dividing total equity by total assets. In this case, the total equity is the sum of share capital and reserves, which is 500,000.
So, the calculation would be:
Equity Ratio = (Total Equity / Total Assets) * 100 Equity Ratio = (500,000) * 100 Equity Ratio = 0.7 * 100 Equity Ratio = 70%
So, the equity ratio is 70%.
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