Use the following information to complete the balance sheet below. Sales are $7.
ID: 2732805 • Letter: U
Question
Use the following information to complete the balance sheet below. Sales are $7.8 million, capital intensity ratio is 2.00 times, debt ratio is 65 percent, and fixed asset turnover is 1.20 times. (Enter your answers in millions of dollars rounded to 2 decimal places.)
Use the following information to complete the balance sheet below. Sales are $7.8 million, capital intensity ratio is 2.00 times, debt ratio is 65 percent, and fixed asset turnover is 1.20 times. (Enter your answers in millions of dollars rounded to 2 decimal places.)
Explanation / Answer
FIXED ASSET TURNOVER RATIO = SALES/ TOTAL ASSETS = 1.2 = 7.8/TOTAL ASSETS
TOTAL FIXED ASSETS = 7.8/1.2 = 6.5 MILLION
CAPITAL INTENSITY RATIO = TOTAL ASSETS/ TOTAL SALES=2 = TOTAL ASSETS/7.8
TOTAL ASSETS = 7.8*2 = 15.6
=15.6*65%=
10.14
=15.6-6.5 =
9.1
LIABILITIES AMOUNT ASSETS AMOUNT TOTAL LIABILITIES=15.6*65%=
10.14
CURRENT ASSETS=15.6-6.5 =
9.1
EQUITY 5.46 FIXED ASSETS 6.5 TOTAL LIABILITIES AND EQUITY 15.6 TOTAL ASSETS 15.6Related Questions
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