The balance sheet for Stud Clothiers is shown next. Sales for the year were $3,2

Question

The balance sheet for Stud Clothiers is shown next. Sales for the year were $3,200,000, with 75 percent of sales sold on credit.

Compute the following ratios: (Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to-total assets answer as a percent rounded to 2 decimal places.)

STUD CLOTHIERS
Balance Sheet 20X1 Assets Liabilities and Equity Cash $ 25,000 Accounts payable $ 247,000 Accounts receivable 351,000 Accrued taxes 97,000 Inventory 251,000 Bonds payable (long-term) 136,000 Plant and equipment 423,000 Common stock 100,000 Paid-in capital 150,000 Retained earnings 320,000 Total assets $ 1,050,000 Total liabilities and equity $ 1,050,000

Explanation / Answer

debt-to-total assets ratio can be calculated as

Total Debt / Total Assets

(Short-term Debt+Long-term Debt) / Total Assets

(247000+97000+136000)/1050000

480000/1050000

.4571

=.46

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