LOAN TO BOOK PUBLISHER. Suppose that RSM Publishing Company, a children’s book publi...

LOAN TO BOOK PUBLISHER. Suppose that RSM Publishing Company, a children’s book publisher, has approached your bank and wants to borrow $250,000 in working capital. The firm provides you with the following balance sheet and income statement data:

1. What fraction of the firm’s current assets is (implicitly) being funded with long-term debt or equity? What is the significance if this figure is large versus small?