Given is:
The total liabilities are $5,000,000 including a loan to expand services.
Net worth at the balance sheet date is given $ 4,000,000.
Hence out of $5,000,000 , $ 4,000,000 is capital and remaining $1,000,000 is loan
Debts to net worth ratio is = [tex]\frac{1000000}{4000000}*100[/tex]
= 0.25 or 25%
