To calculate the debt-to-asset ratio for FPL Company, we need to follow these steps:

Determine the total liabilities: Add the amounts owed to Supplier A, Supplier B, Supplier C, and long-
term bonds payable.

Determine the total assets: Add the cash on hand, inventory value, accounts receivable, and equipment
value.

Divide total liabilities by total assets.

Let's do the calculations:

Total liabilities = Php20,000 (Supplier A) + Php30,000 (Supplier B) + Php50,000 (Supplier C) + Php10,000

(long-term bonds payable) = Php110,000

Total assets = Php20,000 (cash on hand) + Php30,000 (inventory) + Php40,000 (accounts receivable) +
Php50,000 (equipment) = Php140,000

Debt-to-asset ratio = Total liabilities / Total assets = Php110,000 / Php140,000 = 0.7857

The debt-to-asset ratio for FPL Company is 0.7857 or 78.57% when expressed as a percentage. This
means that 78.57% of the company's assets are financed by debt. A ratio less than 1 indicates that the
company has more assets than liabilities, which is generally a good sign for financial health. However, a
ratio of 78.57% is quite high, which could be a cause for concern as it may indicate that the company is
heavily reliant on debt to finance its asset