2. Assume you are an agricultural loan officer for a bank, and a customer reques
ID: 330421 • Letter: 2
Question
2. Assume you are an agricultural loan officer for a bank, and a customer requests a loan based on the following balance sheet. Assets Current Assets Non Current Assets Liabilities and Owner's Equity $ 40,000 Current Liabilities S 60,000 50,000 110,000 $170,000 280,000 240,000 Noncurrent Liabilities Total Liabilities Owner's Equity S 280,000 TOTAL Liabilities and O. TOTAL Assets Equity Calculate the following: a) Current Ratio b) Working Capital c) Debt Structure Ratio d) Debt/Asset Ratio e) Debt/Equity RatioExplanation / Answer
Formula = current assets
Current liabilities
Current assets = 40,000, current liabilities = 60,000
= 40,000
60,000
= 0.67
Formula = current asstes – current liabilities
= 40,000 – 60,000
=($20,000)
Formula = total debt
Total assets
Total debt = current liabilities + long term debt = 1,10,000
Total assets = current assets + net fixed assets = 2,80,000
= 1,10,000/2,80,000
= 0.39
Formula = total liabilities
Stockholder’s equity
Total liabilities = 1,10,000 stockholder’s equity = 1,70,000
=1,10,000
1,70,000
= 0.65
Formula = total liabilities
Total assets
Total liabilities = 1,10,000 total assets = 2,80,000
=1,10,000
2,80,000
=0.39
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