A Firm Began the Current Fiscal Year with Total Assets

Multiple Choice

A firm began the current fiscal year with total assets of $8 million, common shares of $4 million and retained earnings of $2 million.At the end of the current year the firm reported net income of $1 million, all of which was retained by the firm.The debt-to-asset ratio for this reporting period is:

A) 0.25
B) 0.125
C) 0.75
D) 0.5