Question

The balance sheet for Campbell Corporation follows:________.

Current assets $238,000
Long-term assets (net) 756,000
Total assets $994,000
Current liabilities $156,000
Long-term liabilities 444,000
Total liabilities 600,000
Common stock and retained earnings 394,000
Total liabilities and stockholders’ equity $994,000
Required Compute the following. (Round ""Ratios"" to 1 decimal place.)
a. Working Capital?
b. Current Ratio?
c. Debt to assets Ratio?
d. Debt to equity Ratio?

Answer 1

a.

$82,000

b.

1.53

c.

0.6

d.

1.52

Step-by-step explanation:

a.

Working capital is the net of current assets and current liabilities.

Working Capital = Current Asset - Current Liabilities

Placing values in the formula

Working Capital = $238,000 - $156,000

Working Capital = $82,000

b.

Current ratio is the ratio of current asset and liabilities.

Current Ratio = Current Assets / Current Liabilities

Placing values in the formula

Current Ratio = $238,000 / $156,000

Current Ratio = 1.53

c.

Debt to asset ratio is the ratio of debt to total assets of the company.

Debt to assets Ratio = Total Liabilities / Total Assets

Placing values in the formula

Debt to assets Ratio = $600,000 / $994,000

Debt to assets Ratio = 0.60

d.

Debt to equity ratio is the ratio of debt to equity of the company.

Debt to equity Ratio = Total Liabilities / equity

Placing values in the formula

Debt to equity Ratio = $600,000 / $394,000

Debt to equity Ratio = 1.52