Frank's Welding has net fixed assets of $36,200, total assets of $51,300, long-term debt of $22,000, and total debt of $29,700. What is the net working capital to total assets ratio?
A) 12.18 percent
B) 16.82 percent
C) 14.42 percent
D) 17.79 percent
E) 9.90 percent

Question

Quizplus · Accepted Answer

Net working capital = Total current assets - Total current liabilities
Total current assets = Total assets - Net fixed assets = $51,300 - $36,200 = $15,100
Total current liabilities = Total debt - Long-term debt = $29,700 - $22,000 = $7,700
Net working capital = $15,100 - $7,700 = $7,400
Net working capital to total assets ratio = (Net working capital / Total assets) x 100%
= ($7,400 / $51,300) x 100% = 14.42%.
Therefore, the best choice is C.

Frank's Welding Has Net Fixed Assets of $36,200, Total Assets