Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Chapter 3, Problem 9P
Summary Introduction
To calculate: The amount of short term debt and the quick ratio of the company.
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The Nelson Company has $1,430,000 in current assets and $550,000 in current liabilities. Its initial inventory level is $400,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.
The Nelson Company has $1,248,000 in current assets and $480,000 in current liabilities. Its initial inventory level is $320,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar.
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What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.
The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise fundsas additional notes payable and use them to increase inventory. How muchcan Nelson’s short-term debt (notes payable) increase without pushing itscurrent ratio below 2.0? What will be the firm’s quick ratio after Nelson hasraised the maximum amount of short-term funds?
Chapter 3 Solutions
Financial Management: Theory & Practice
Ch. 3 - Define each of the following terms:
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Ch. 3 - Needham Pharmaceuticals has a profit margin of 3%...Ch. 3 - Gardial Son has an ROA of 12%, a 5% profit...Ch. 3 - Ace Industries has current assets equal to 3...Ch. 3 - Assume you are given the following relationships...Ch. 3 - Prob. 9PCh. 3 - The Morrit Corporation has $600,000 of debt...Ch. 3 - Complete the balance sheet and sales information...Ch. 3 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 3 - Data for Lozano Chip Company and its industry...Ch. 3 - The Jimenez Corporation’s forecasted 2020...Ch. 3 - Why are ratios useful? What three groups use ratio...Ch. 3 - Calculate the projected profit margin, operating...Ch. 3 - Calculate the projected inventory turnover, days...Ch. 3 - Prob. 4MCCh. 3 - Calculate the projected debt ratio, debt-to-equity...Ch. 3 - Calculate the projected price/earnings ratio and...Ch. 3 - Prob. 7MCCh. 3 - Use the extended DuPont equation to provide a...Ch. 3 - What are some potential problems and limitations...Ch. 3 - What are some qualitative factors that analysts...
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