Sobey Limited has been told that its debt to total assets ratio is too high. To...
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Sobey Limited has been told that its debt to total assets ratio is too high. To combat this, they decided to stretch out the length of time that they take to pay suppliers and use those funds to make payments on their long-term debt obligations instead. By doing this, they managed to pay off an extra $97,000 of long-term debt. Assuming all things other than that remain the same, how much change in the debt to assets ratio will occur? Sobey Limited has been told that its debt to total assets ratio is too high. To combat this, they decided to stretch out the length of time that they take to pay suppliers and use those funds to make payments on their long-term debt obligations instead. By doing this, they managed to pay off an extra $97,000 of long-term debt. Assuming all things other than that remain the same, how much change in the debt to assets ratio will occur? Sobey Limited has been told that its debt to total assets ratio is too high. To combat this, they decided to stretch out the length of time that they take to pay suppliers and use those funds to make payments on their long-term debt obligations instead. By doing this, they managed to pay off an extra $97,000 of long-term debt. Assuming all things other than that remain the same, how much change in the debt to assets ratio will occur?
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To calculate the change in the debt to asset ratio we need to determine the new debt and asse... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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