Reynolds Construction needs a piece of equipment that costs $200. Reynolds either can lease the equipment or borrow $200 from a local bank and buy the equipment. If the equipment is leased, the lease would not have to be capitalized. Reynolds's balance sheet prior to the acquisition of the equipment is as follows: Current assets $250 Debt $300 Net Fixed assets 450 Equity 400 Total assets $700 Total claims $700
What is Reynolds' current debt ratio? Round your answer to two decimal places. %
What would be the company's debt ratio if it purchased the equipment? Round your answer to one decimal place. %
What would be the debt ratio if the equipment were leased? Round your answer to two decimal places. %