1. What effect would the following actions have on a firm’s current ratio? Assume that new working capital is positive. a. A short term bank loan is repaid. b. A long-term debt is paid off early. For a, would the current ratio
A firm has a current assets of $800,000, current liabilities of $600,000. The firm uses $200,000 of its cash balance to pay off a current liabilities. Calculate the current ratio before and after this transaction.
A firm has a long-term debt-equity ratio of 0.5. Shareholders’ equity is $1.07 million. Current assets are $256,500, and the current ratio is 1.9. The only current liabilities are notes payable. What is the total debt ratio?
A quick ratio much smaller than the current ratio reflects 1) a small portion of current assets is in inventory. 2) a large portion of current assets is in inventory. 3) that the firm will have a high inventory turnover. 4) that
quick ratio that is much smaller than the current ratio reflects A. a small portion of current assets is in inventory. B. that the firm will have a high inventory turnover. C. that the firm will have a high return on assets. D. a
A firm has $600,000 in current assets and $150,000 in current liabilities. Which of the following is correct if they use cash to pay off $50,000 in accounts payable? 1)Current ratio will increase to 5.0. 2)Net working capital will
If a firm has a current ratio of 2.00,it means that for every $2in ___it has $1in___ A.total assets;current liabilities B.current assets;current liabilities C.total assets;total liabilities D.current assets;total liabilities my
A firm wishes to maintain an internal growth rate of 4.5 percent and a dividend payout ratio of 60 percent. The current profit margin is 7.5 percent and the firm uses no external financing sources. What must the total asset
A firm wants to maintain a growth rate of 7% without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .6 a total asset turnover ratio of .75, and a profit margin of 6%. What must the
n auto-service establishment has estimated its monthly cost function as follows: TC = 6000 + 10 Q where Q is the number of cars it services each months and TC represents its total cost. The firm is targeting 35,000 net monthly