Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

iven the information below for Pamplin Inc.: How much is the firm's net working capital and what is the debt ratio for 2010? Pamplin Inc.

iven the information below for Pamplin Inc.: How much is the firm's net working capital and what is the debt ratio for 2010?

Pamplin Inc. Balance Sheet at 12/31/2009 and 12/31/2010

ASSETS

2009

2010

Cash

$200

$150

Accounts receivable

450

425

Inventory

550

625

Current assets

$1,200

$1,200

Plant and equipment

$2,200

$2,600

Less accumulated depreciation

1,000

1,200

Net plant and equipment

$1,200

$1,400

Total assets

$2,400

$2,600

LIABILITIES AND OWNERS' EQUITY

2009

2010

Accounts payable

$200

$150

Notes payable--current (9%)

0

150

Current liabilities

$200

$300

Bonds

$600

$600

Owners' equity

Common stock

$900

$900

Retained earnings

700

800

Total owners' equity

$1,600

$1,700

Total liabilities and owners' equity

$2,400

$2,600

Pamplin Inc. Income Statement for Years Ending 12/31/2009 and 12/31/2010

2009

2010

Sales

$1,200

$1,450

Cost of goods sold

700

850

Gross profit

$500

$600

Selling, general and administrative expenses

$30

$40

Depreciation

220

250

200

240

Operating income

$250

$360

Interest expense

50

64

Net income before taxes

$200

$296

Taxes (40%)

80

118

Net income

$120

$178

. How much is the firm's net working capital and what is the debt ratio?

The net working capital is $_____ (Round to the nearest dollar.) The debt ratio is _____% (Round to one decimal place.)

Can someone help with this, please!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Private Funds Where And How

Authors: Dechert LLP

2018 Edition

152650300X,1526503018

More Books

Students also viewed these Finance questions