Ask Question
23 July, 04:46

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?

+4
Answers (1)
  1. 23 July, 06:53
    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?
Get 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 there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers