Calculation of debt ratio:
Debt Ratio can be calculated using the following formula:
Debt Ratio = Total Debt / Total Assets
We are given that debt/equity ratio is 0.50, it means Total Equity = 2 * Total Debt
Total Assets = Total Debt + Total Equity
So, Total Assets = Total Debt + 2* Total Debt
Or
Total Assets = 3* Total Debt
So, Debt Ratio = Total Debt / 3* Total Debt = 1/3 = 0.3333
Hence, Debt ratio is 0.3333
