Given the following Year 12 balance sheet data for a footwear company Balance Sh

Question

Given the following Year 12 balance sheet data for a footwear company Balance Sheet Data Cash on Hand Total Current Assets Total Assets Overdraft Loan Payable 1-Year Bank Loan Payable Current Portion of Long-Term Loans Total Current Liabilities Long-Term Bank Loans Outstanding 5,000 70,000 300,000 3,000 15,000 20,000 55,000 100,000 Year 11 Year 12 Balance Change Shareholder Equity: Common Stock Additional Capital Retained Earnings Total Shareholder Equity 10,000 110,000 15,000 10,000 25,000 0 10,000 0 110,000 13 Based on the above figures and the formula for calculating the debt-assets ratio, the company's debt-assets ratio (where debt is defined to include both short-term and long-term debt) is o0.45 0.33 0.127

Explanation / Answer

ANSWER = A) 0.45

Debt- asset ratio = Total debt / Asset

= 135000 / 300000

= 0.45

Total assets = $ 300000

Total liabilities = loan-term bank loans outstanding + 1-year bank laon payable + current portion of long-term loans

= 100000 + 15000 + 20000

= 135000

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.