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8. Lombardi has the following balance sheet: Current assets $7,000 A/P & Accruals Net property & plant 3,000 Notes Payables Common Stock Ret. Earnings Total
8. Lombardi has the following balance sheet: Current assets $7,000 A/P & Accruals Net property & plant 3,000 Notes Payables Common Stock Ret. Earnings Total assets $10.000 Total liab. + Equity $1,500 2,500 1,000 5.000 $10.000 Lombardi's after-tax profit margin is 8 percent, and the company pays out 45 percent of its earnings as dividends. Its sales this year were $10,000; its assets were used to full capacity and the profit margin and payout ratio are expected to remain constant. The company plans to raise capital using short-term (3-months) loans (Notes Payables) next year. If sales is expected to grow by 45 percent, what will Lombardi's current ratio be after it has raised the necessary capital from issuing Notes Payables
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