Financial Managment

 

The liability and owners’ equity for Campbell Industries is found here:

 

Account Receivable -$523,000

 

Notes payable- $247,000

 

Current Liabilities- $770,000

 

Long term debt- $1,276,000

 

Common Equity – $5,041,000

 

Total Liabilities & Equity – $7,087,000

 

 

 

  1. What percentage of the firm’s assets does the firm finance using debt (liability)?

  2. If Campbell were to purchase a nw warehouse for $1.2 million and finance it entirely with long-term debt, what would be the firm’s new debt ratio?

     

    The fraction of the firm’s assets that the firm fiancé using debt is _____ %