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Investing Lesson 3
Quiz: How to Analyze a Balance Sheet

Explanation of $16,000 Question

Total Debt
-----(divided by)-----
Shareholder Equity

The company has $385 million in long term debt and $25 million in short term debt.  $385m + $25m = $410 million total debt.  The shareholder equity was $4 billion.  Plug the numbers into the formula:

Total Debt = $410,000,000
-----(divided by)-----
Shareholder Equity = $4,000,000

The answer is .1025 (or 10.25%)

Continue quiz>

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