CFAI Reading 24 Q 17

The question asks to calculate ratio of liabilities to total capital.

and then calculates it as liabilities/assets.

I thought capital = Assets - liabilities.

Am I missing something?


ok this is what i understand after doing some research.

Working Capital = Current Assets - Current Liabilities (including payables and DTL and any current liabilities)

on the other hand

Capital = equity + debt (so wouldn’t include payables and DTL and other type of liabilities)

Is that correct?