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