assets Total current liabilities Debt Ratio C. Debt ratio -the proportion of a company's assets financed with debt. Debt ratio = Total Liabilities Total Assets D How transactions affect the ratios Given the following balances: Current Assets $150,000 Current Liabilities 75,000 Total Assets Total Liabilities 300,000 120,000 1. What is net working capital? 2. What are the current and debt ratios? 3. How would the following transactions affect the current ratio & the debt ratio (Improve, Deteriorate, No Change)? a. Receiving $10,000 in cash in exchange for common stock. b. Accruing for $2,000 of salaries expense at the end of the period. c. Purchasing $2,500 of supplies on account. 3-11