1

I've read that to calculate equity-to-assets using assets-to-equity the following can be done:

assets-to-equity = 40%

equity-to-assets = 1/0.4 = 2.5

Why does that work out?

1 Answer 1

3

Because the formulae are the inverse of each other, and the way to compute the inverse of X is 1/X. That's just the mathematical definition of "inverse".

0

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .