Calculate the debt ratio from the following information: Land and building = $500,000
Machinery = $300,000
Cash in hand = $400,000
Total debts = $300,000.

A) 3:4
B) 1:4
C) 2:3
D) 2:2
E) 1:3

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing its total liabilities by its total assets.

Land and Building

Real estate assets, including both the ground itself and any structures on it, considered key components of property investment and valuation.

Machinery

Equipment with moving mechanical parts used in industrial or manufacturing processes to facilitate production.