d. Calculate the NWC to total assets ratio for each year. ( Do not round interme

Question

d. Calculate the NWC to total assets ratio for each year. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Calculate the debt–equity ratio and equity multiplier for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

Calculate the total debt ratio and long-term debt ratio for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Ans (e)

Nwc = current assets - current liabilities

2014 nwc = 63200 - 54240 = 8960

2015 nwc = 84800 - 63400 = 21400

Total assets

2014 = 320000

2015 = 400000

NWC RATIO = NWC/TO.ASSETS

2014 = 8960/320000 = 0.028

2015 = 21400/400000 = 0.0535

Ans (b)

Debt equity ratio = debt/equity

2014 = 32000/233760 = 0.1368

2015 = 24000/312600 = 0.076

Equity multiplier = total assets/shareholder fund

2014 = 320000/233760 = 1.368 times

2015 = 400000/312600 = 1.279 times

Answer (f)

Total debt ratio = total debt/total assets

2014 = 86240/320000 = 0.2695

2015 = 87400/400000 = 0.2185

Long-term debt ratio = long-term debt / total assets

2014 = 32000/320000 = 1/10 = 0.10

205 = 24000/400000 = 6/100 = 0.06

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