The debt-to-assets ratio is calculated as the total debt divided by the total assets. If the asset is leased under an operating lease, the ratio will remain unchanged as there will be no increases in the level of debt or the level of assets.
The debt-to-assets ratio is calculated as the total debt divided by the total assets. Let us assume that currently the company has $100 of debt and $200 of assets. This gives us the .50 ratio that currently exists. If the assets are purchased, both the debt and the assets will increase by the amount of the purchase (let us assume $50). This will make the ratio $150 / $250, or .60 – an increase. If the assets are acquired under an operating lease there will be no debt recorded and there will be no asset recorded, so the ratio will remain unchanged.
The debt-to-assets ratio is calculated as the total debt divided by the total assets. If the assets are purchased by using borrowed funds, the ratio will change. See the correct answer for a more detailed explanation.
The debt-to-assets ratio is calculated as the total debt divided by the total assets. If the asset is purchased through the use of borrowed funds, the ratio will change. See the correct answer for a more detailed explanation.
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