To find the debt ratio of the company, we need to divide the total liabilities by the total assets. This ratio provides insight into the proportion of a company's assets that are financed by debt.
Given that the company has total assets of $500,000 and total liabilities of $300,000, we will use the following formula to calculate the debt ratio:
\[ \text{Debt Ratio} = \frac{\text{Total Liabilities}}{\text{Total Assets}} \]
By plugging in the values:
\[ \text{Debt Ratio} = \frac{300,000}{500,000} \]
By doing the division, we find:
\[ \text{Debt Ratio} = 0.6 \]
Therefore, the debt ratio of the company is \(0.6\), which is equivalent to 60%, meaning that 60% of the company's assets are financed through debt.
The correct answer to choose among the options provided is \(0.6\).
