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Define leverage ratio as ending debt divided by ending total assets, and debt as the...

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Accounting

Define leverage ratio as ending debt divided by ending total assets, and debt as the sum of non-
operating liabilities. The leverage ratio as reported by Rent-A-Center in 2021 was 0.326
calculated as follows (numbers are inclusive of operating lease assets and liabilities):
Using the present value of operating leases disclosed by the firm of $296,535, calculate what the
debt ratio would have been had the new accounting rules not been adopted. Assume the
reported operating lease liability equals the reported right-of-use asset amount. Hint, the number
will be less than 0.624 and somewhere between 0.5 and 0.6.
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