Brian porter's net worth is $110,000, excluding his home. his liabilities of $50,000 include all of his credit card balances and the balance due on his auto loan and home improvement loan. his townhouse has a market value of $220,000 and he owes $190,000 to his mortgage company. what is brian's debt-to-equity ratio?

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Business

Ryland Schroeder

31 May, 21:53

Brian porter's net worth is $110,000, excluding his home. his liabilities of $50,000 include all of his credit card balances and the balance due on his auto loan and home improvement loan. his townhouse has a market value of $220,000 and he owes $190,000 to his mortgage company. what is brian's debt-to-equity ratio?

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Brenden Armstrong · Answer 1

Debt/Equity ratio is defined as the value calculated by dividing total liabilities by the total net worth. With this definition we can identify that Brian Porter’s total liability is $50,000 and the net worth is $110,000.

Therefore Brian's debt-to-equity ratio is:

D/E ratio = $50,000 / $110,000

D/E ratio = 0.45