Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 245 Current liabilities Long-term debt 630 Other liabilities Equity $875 $ 170 215 140 350 $ 875 Required: a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, Long-term debt, and Other Note: Round your answer to 2 decimal places. b. What is the ratio of total long-term debt to total long-term capital? Note: Round your answer to 2 decimal places. c. What is its net working capital?

Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 245 Current liabilities Long-term debt 630 Other liabilities Equity $875 $ 170 215 140 350 $ 875 Required: a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, Long-term debt, and Other Note: Round your answer to 2 decimal places. b. What is the ratio of total long-term debt to total long-term capital? Note: Round your answer to 2 decimal places. c. What is its net working capital?

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Description: Consider this simplified balance sheet for Geomorph Trading:Current assetsLong-term assets$ 245 Current liabilitiesLong-term debt630Other liabilitiesEquity$ 875Required:a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, L

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

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Concept explainers

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.

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Question

Consider this simplified balance sheet for Geomorph Trading:
Current assets
Long-term assets
$ 245 Current liabilities
Long-term debt
630
Other liabilities
Equity
$ 875
Required:
a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, Long-term debt, and Other liabilities)
Note: Round your answer to 2 decimal places.
b. What is the ratio of total long-term debt to total long-term capital?
Note: Round your answer to 2 decimal places.
c. What is its net working capital?
d. What is its current ratio?
Note: Round your answer to 2 decimal places.
$ 170
215
140
350
$ 875
a Debt-equity ratio
b. Long-term debt-to-capital ratio
c. Net working capital
d. Current ratio

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Step 1: Given Data: Current Assets = $245 Long-term Assets = $630 Current Liabilities = $170 Long-term

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Step 2: Calculating debt-equity ratio

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Step 3: Calculating long term debt to long term capital

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Step 4: calculating net working capital

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Step 5: calculating current ratio

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