fiance math

Table 4-1
Garland Company Balance Sheet
Assets:
Cash and marketable securities  $500,000
Accounts receivable  800,000
Inventories 1,350,000
Prepaid expenses  50,000
Total current assets $2,700,000
Fixed assets 5,000,000
Less: accum. depr.  (2,000,000)
Net fixed assets  $3,000,000
Total assets $5,700,000
Liabilities:
Accounts payable  $400,000
Notes payable  900,000
Accrued taxes  75,000
Total current liabilities    $1,375,000
Long-term debt  1,200,000
Owner’s equity  3,125,000
Total liabilities and owner’s equity $5,700,000
Net sales (all credit)  $8,000,000
Less: Cost of goods sold  (3,500,000)
Selling and administrative expense (2,000,000)
Depreciation expense  (250,000)
Interest expense  (150,000)
Earnings before taxes  2,100,000
Income taxes  (700,000)
Net income $1,400,000
Common stock dividends  $500,000
Common Shares Outstanding  1,000,000
34) Based on the information in Table 4-1, the debt ratio is:
a. 21.1%
b. 48.8%
c. 45.2%
d. 22.6%