Having a lot of trouble calculating these values. Please round to 4 decimal plac
ID: 2399113 • Letter: H
Question
Having a lot of trouble calculating these values. Please round to 4 decimal places. Total Debt for 2013 = $19,271.00 and I cannot figure out how total debt for 2014 is calculated...
Leverage ratlos 1. Total debt-to- assets ratio Total debt Total assets Measures the extent to which borrowed funds (both short-term loans and long-term debt) have been used to finance the firm's operations. A low ratlo Is better-a high fraction Indicates overuse of debt and greater risk of bankruptcy A measure of creditworthiness and balance sheet 2. Long-term debt Long-term debt to-capital ratio Long-term debtTotal stockholders' equity strength. It Indicates the percentage of capital Investment that has been financed by both long- term lenders and stockholders. A ratio below 0.25 Is preferable since the lower the ratio, the greater the capacity to borrow additional funds. Debt-to-capltal ratlos above 0.50 Indicate an excesslve rellance on long-term borrowing, lower creditworthiness, and weak balance sheet strength. Total debt Total stockholders' equity 3. Debt-to-equity Shows the balance between debt funds borrowed both short term and long term) and the amount that stockholders have Invested In the enterprise. The further the ratio is below 1.0, the greater the firm's abllity to borrow additional funds. Ratios above 1.0 put creditors at greater risk, slgnal weaker balance sheet strength, and often result in lower credit ratings. ratio 4. Long-term debt to-equity ratio Long-term debt Total stockholders' equity Shows the balance between long-term debt and stockholders' equity in the firm's long-term capital structure. Low ratios Indicate a greater capacity to borrow additional funds If needed. 5. Times-Interest Operating Income Interest expenses Measures the abllity to pay annual Interest charges. Lenders usually Insist on a minlmum ratlo of 2.0, but ratlos above 3.0 slgnal progresslvely better creditworthiness. earned (or coverage) ratio Actlvity ratios 1. Days of Inventoryy Measures Inventory management efficlency Fewer days of Inventory are better. inventory Cost of goods sold 365 2. Inventory Cost of goods sold Inventory Measures the number of Inventory turns per year Higher is better. turnover 3. Average collection perlod ccounts recelvable Total sales365 Indicates the average length of time the firm must walt after maklng a sale to recelve cash payment. A shorter collection time is better. or Accounts recelvable Average dally salesExplanation / Answer
Answers
Numerator
/
Denominator
=
Ratio
d.
Net Income
Total Stockholder's Equity
Return on Shareholder's Equity
2013 'already correct'
$ 2,039.00
$ 11,012.00
18.52%
2014 'corrected'
$ 2,058.00
$ 12,515.00
0.1644 or 16.4442 or 16.44%
Numerator
/
Denominator
=
Ratio
e.
Net Income + Interest expense
/
Total Assets
Return On Assets
2013 'already correct'
$ 2,138.00
$ 30,283.00
7.06%
2014 'corrected'
$ 2,171.00
$ 33,024.00
0.0657 or 6.5740 or 6.57%
2014
2013
Total Assets
$ 33,024.00
$ 30,283.00
Long Term Debts (A)
$ (5,093.00)
$ (4,998.00)
Total Stockholder's Equity
$ (12,515.00)
$ (11,012.00)
Short Term Debt (B)
$ 15,416.00
$ 14,273.00
Total Debts (A+B)
$ 20,509.00
$ 19,271.00
Answer
Numerator
/
Denominator
=
Ratio
e.
Total Debts
/
Total Stockholder's Equity
Debts-To-Equity Ratios
2013 'already correct'
$ 19,271.00
$ 11,012.00
1.75
2014 'corrected'
$ 20,509.00
$ 12,515.00
1.6388 or 1.64
Numerator
/
Denominator
=
Ratio
d.
Net Income
Total Stockholder's Equity
Return on Shareholder's Equity
2013 'already correct'
$ 2,039.00
$ 11,012.00
18.52%
2014 'corrected'
$ 2,058.00
$ 12,515.00
0.1644 or 16.4442 or 16.44%
Numerator
/
Denominator
=
Ratio
e.
Net Income + Interest expense
/
Total Assets
Return On Assets
2013 'already correct'
$ 2,138.00
$ 30,283.00
7.06%
2014 'corrected'
$ 2,171.00
$ 33,024.00
0.0657 or 6.5740 or 6.57%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.