If a company has the following structure Assets: ........... 10,000 Total Debt: ..........25, 000 Equity Common stock
Question:
Assets: ........... 10,000
Total Debt: ..........25, 000
Equity
Common stock & APIC: .... 5,000
Deficit: .......... (20,000)
Total equity: ........ (15,000)
How do you compute the debt to equity ratio since the formula I know is Total Debt / Total Equity? Is it possible for the debt to equity ratio to be negative?
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Jehal Shah
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