Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.6.Current liabilities are $700,sales are $4,440,the profit margin is 9.5 percent,and the return on equity is 19.5 percent.How much does the firm have in net fixed assets?
A)$4,880.18
B)$4,987.69
C)$5,666.67
D)$5,848.15
E)$6,107.70

Question

Quizplus · Accepted Answer

Current assets = 1.6 × $700 = $1,120Net income = .095 × $4,440 = $421.80Total equity = $421.80/.195 = $2,163.07690.6 = Long term debt/(Long-term debt + $2,163.0769); Long-term debt = $3,244.6153Total debt = $700 + $3,244.6153 = $3,944.6153Total assets = $3,944.6153 + $2,163.0769 = $6,107.6922Net fixed assets = $6,107.6922 - $1,120 = $4,987.69

Gladstone Pavers Has a Long-Term Debt Ratio of 0