Question

The mikado company has a long-term debt ratio of .35 and a current ratio of 1.45. current liabilities are $1,140, sales are $8,370, profit margin is 8.3 percent, and roe is 16.5 percent. what is the amount of the firm’s net fixed assets?

Answer 1

To calculate the net fixed assets, one must first determine the total assets and then subtract current assets. The provided ratios and figures are intended to be used for such calculation, but the question seems to contain a mismatch or insufficient data for a precise solution.

Step-by-step explanation:

The student is required to calculate the firm's net fixed assets using the provided financial ratios and figures. An approach to find the net fixed assets is first to determine the firm's total assets and then subtract the current assets, thus leaving the net fixed assets. Since the Long-term Debt Ratio is 0.35, this implies that long-term debt is 35% of total assets. The current ratio, given as 1.45, helps us find current assets by multiplying it by current liabilities ($1,140). By calculating net income using the given profit margin (8.3% of sales) and connecting it to ROE (16.5%), we can deduce equity and, subsequently, the total assets. However, since the question and provided figures do not align perfectly with typical financial analysis and some components – like total assets – are not directly given, we cannot accurately calculate the net fixed assets with the given information and without further clarification.