2. ABC Company

ABC Company is thinking about purchasing XYZ Corporation to merge into operations. The following Balance Sheet of XYZ Corporation is the only information you have available as a strategist for your analysis.

XYZ Corporation
Balance Sheet
December 31, 2020
ASSETS
Cash	$50,000
Accounts Receivable	80,000
Inventory	20,000
Total Current Assets		150,000
Property, Plant and Equipment (net)	200,000
Long Term Investments	50,000
Goodwill	100,000
Total Assets		$500,000
LIABILITIES/STOCKHOLDERS' EQUITY
Accounts Payable	$130,000
Accrued Expenses	120,000
Total Current Liabilities		250,000
Long-Term debt	150,000
Stockholders' Equity
Common Stock	10,000
Paid-In Capital	40,000
Retained Earnings	50,000
Total Liabilities/Stockholders' Equity		$500,000

Required

You will need to first compute a Debt/Assets ratio BEFORE any adjustments AND explain what it means. Then, based solely on the above provided balance sheet numbers and class recorded presentation, what adjustment(s) or write off(s), if any, would you make in valuing XYZ Corporation? If no adjustments need to be made then be sure to clearly state that no adjustment(s) is/are necessary. Also, IF you made any adjustments then you will need to compute another adjusted Debt/Assets ratio. Finally, your Debt/Assets ratio(s) must include a brief discussion and conclusion of any insights you have. [NOTE - Please be sure to clearly show ALL your work.]