Ask Question
19 January, 06:39

Stone Walls has a long-term debt ratio of. 6 and a current ratio of 1.2. Current liabilities are $800, sales are $7,800, the profit margin is 6.5 percent, and return on equity is 15.5 percent. What is the amount of the firm's net fixed assets?

+5
Answers (1)
  1. 19 January, 08:00
    0
    The answer is $8017.43

    Explanation:

    current ratio = current assets/current liabilities=1.2*800=$960

    Net income = 0.65 * 7800=$507

    return on equity = net income / total equity=507/0.155=$3270.97

    Long term debt ratio = Long term debt / (Long term debt + total equity)

    0.6 = Long term debt / Long term debt + $3270.97 = $4906.46

    Total debt = 800 + 4906.46 = $5706.46

    Total assets = $5706.46 + $3270.97 = $8977.43

    Net fixed assets = $8977.43 - $960 = $8017.43
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Stone Walls has a long-term debt ratio of. 6 and a current ratio of 1.2. Current liabilities are $800, sales are $7,800, the profit margin ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers