Our company holds $200,000 in accounts payable and $100,000 in accounts receivable. Additionally, the firm has $200,000 in inventories and $600,000 in land and equipment, a long-term bank loan of $100,000 and has issued a long-term bond for $300,000. Finally, the company has net income 150,000$ and 30,000 shares outstanding that currently sell for 35$ each. 1. Carefully create the Balance Sheet of the firm. 2. Estimate the current and the quick ratio. 3. What is the net working capital of the firm?

Our company holds $200,000 in accounts payable and $100,000 in accounts receivable. Additionally, the firm has $200,000 in inventories and $600,000 in land and equipment, a long-term bank loan of $100,000 and has issued a long-term bond for $300,000. Finally, the company has net income 150,000$ and 30,000 shares outstanding that currently sell for 35$ each. 1. Carefully create the Balance Sheet of the firm. 2. Estimate the current and the quick ratio. 3. What is the net working capital of the firm?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problem 1: The Boring Problem
Our company holds $200,000 in accounts payable and $100,000 in accounts receivable. Additionally,
the firm has $200,000 in inventories and $600,000 in land and equipment, a long-term bank loan
of $100,000 and has issued a long-term bond for $300,000. Finally, the company has net income
150,000$ and 30,000 shares outstanding that currently sell for 35$ each.
1. Carefully create the Balance Sheet of the firm.
2. Estimate the current and the quick ratio.
3. What is the net working capital of the firm?
4. Estimate the total debt ratio and the debt-to-equity ratio.
5. Estimate the price-earnings ratio and the market-to-book ratio.

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