The Maurer Company has a long-term debt ratio of 42 and a current ratio of 1.40....

Question

Question

The Maurer Company has a long-term debt ratio of 42 and a current ratio of 1.40. Current liabilities are $980, sales are $6,4

Answer 1

Answer #1

Long term debt ratio = 0.42

Long term Debt/ Assets = 0.42

Long term debt = Assets * 0.42

Current ratio = 1.4

Current liabilities = $ 980

Current Assets = Current liabilities * Current ratio = 1.4 * 980 = $ 1,372

Sales = $ 6,400

Profit margin = 9.5%

Net Profit = 9.5% * 6400 = $ 608

ROE = 20.3%

ie Net Profit/ Equity = 20.4%

Equity = Net profit/ 20.4% = $ 2980.39

Assets = Equity + Long term debt + Current liability

Assets = 2980.39 + Assets * 0.42 + 980

Assets =$ 6828.26

Net fixed assets = Assets - Current assets = 6828.26 - 1372 = $ 5,456.26

Answer 2

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