An entity has $330 000 of assets including current assets of $90 000. The following information has also been ascertained about the entity:
• The two owners have contributed $75 000 each.
• The entity has always distributed all the profits via a family trust.
• The entity owes$65 000 to trade creditors and other creditors.
• The remainder of the entity's financing is via a mortgage loan.
• The entity made a profit this year (before tax) of $35 000.
•The profit figure includes $15 000 of interest associated with the loan.
Judge which of the following statements is correct.
a. The entity's current ratio is 2:1.
b. The entity uses more debt financing that equity financing.
c. The entity's net assets are $265 000.
d. The entity's debt ratio is 55 per cent.