Before she applied for a long term bank loan, shira wants to figure out her debt to asset ratio.Shira has two liabilities: a credit card balance of $1,300 and a car loan balance of $4,800. Shiraz’s car has a market value not $9,000. She also has a balance of $1,450 in her savings account and has stocks that are currently worth $1,050. What is shiras debt to asset ratio?
To calculate Shira's debt to asset ratio, we need to add up all her liabilities (debts) and all her assets.
Liabilities:
Credit card balance: $1,300
Car loan balance: $4,800
Assets:
Car market value: $9,000
Savings account balance: $1,450
Stock value: $1,050
Total Liabilities: $1,300 + $4,800 = $6,100
Total Assets: $9,000 + $1,450 + $1,050 = $11,500
Debt to Asset Ratio = Total Liabilities / Total Assets
Debt to Asset Ratio = $6,100 / $11,500
Debt to Asset Ratio ≈ 0.5304
Therefore, Shira's debt to asset ratio is approximately 0.5304, or 53.04%.
To calculate Shira's debt to asset ratio, we need to determine her total liabilities and assets.
1. Calculate the total liabilities:
- Credit card balance: $1,300
- Car loan balance: $4,800
Total liabilities = $1,300 + $4,800 = $6,100
2. Calculate the total assets:
- Car market value: $9,000
- Savings account balance: $1,450
- Stocks value: $1,050
Total assets = $9,000 + $1,450 + $1,050 = $11,500
3. Calculate the debt to asset ratio:
Debt to asset ratio = Total liabilities / Total assets
Debt to asset ratio = $6,100 / $11,500 ≈ 0.5304
Therefore, Shira's debt to asset ratio is approximately 0.5304 or 53.04%.