Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 110 510 Net working capital $ 620 a. Debt-equity ratio b. Long-term debt-to-capital ratio C. d. Current ratio a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round your answer to 2 decimal places.) Current liabilities Long-term debt Other liabilities Equity $ 65 275 80 200 $620
Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 110 510 Net working capital $ 620 a. Debt-equity ratio b. Long-term debt-to-capital ratio C. d. Current ratio a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round your answer to 2 decimal places.) Current liabilities Long-term debt Other liabilities Equity $ 65 275 80 200 $620
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Consider this simplified balance sheet for Geomorph Trading:
Current assets
Long-term assets
$ 110
510
Net working capital
$ 620
a.
Debt-equity ratio
b Long-term debt-to-capital ratio
C.
d. Current ratio
a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.)
b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.)
c. What is its net working capital?
d. What is its current ratio? (Round your answer to 2 decimal places.)
Current liabilities
Long-term debt
Other liabilities
Equity
$ 65
275
80
200
$ 620
Expert Solution
Step 1
A) Debt-Equity Ratio=Total debt/Total shareholders' equity
Total debt=Long term debt+ current liabilities + other liabilities
=275+65+80
=420
Total shareholders' equity= Equity=200
Debt-Equity Ratio=420/200
=2.1
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