The top management of Princeton Marketing ServicesPrinceton Marketing Services examines the following company accounting records at August$29,$ immediately before the end of the$$ company's year, August$31$:

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Question content area bottom

Part $1$

Requirement $1.$ Suppose PrincetonPrinceton$\text{'}$s management wants to achieve a current ratio of $2\mathrm{.}52\mathrm{.}5.$ How much in current liabilities should PrincetonPrinceton pay off within the next two days in order to achieve its$$ goal?

Begin by determining the formula for the current ratio. Then select the amounts in the equation you will need to use to determine the amount of current liabilities Princeton Marketing ServicesPrinceton Marketing Services should pay off within the next two days in order to achieve its goal. $($Let X be the amount of current liabilities to pay$$ off.$)$

Part $2$

$-$:

$=$

Current ratio

$-$:

$=$

$2\mathrm{.}50$

Part $3$

Using the equation you determined$$ above, solve for the amount of current liabilities PrincetonPrinceton should pay off within the next two days in order to achieve its goal. $($Round your answer to the nearest whole$$ dollar.$)$

To achieve a current ratio of $2\mathrm{.}5$ Princeton Marketing Services should pay off

of current liabilities within the next

two days.

Part $4$

Requirement $2.$ Calculate PrincetonPrinceton$\text{'}$s leverage ratio and debt ratio ignoring requirement $1.$ Use$$ year$-$end figures in place of averages where needed for the purpose of calculating ratios in this exercise. Evaluate the$$ company's debt position. Is it$$ low, high, or about$$ average? What other information might help you to make a$$ decision?

Begin by computing the leverage ratio. Select the formula for the leverage ratio. Then complete the formula and calculate the leverage ratio. $($Round your answer to two decimal$$ places.$)$

Part $5$

$-$:

$=$

Leverage ratio

$-$:

$=$

Part $6$

$$Now$,$ select the formula for the debt ratio. Then complete the formula and calculate the debt ratio. $($Round your answer to two decimal$$ places.$)$

Part $7$

$-$:

$=$

Debt ratio

$-$:

$=$

Part $8$

Evaluate the$$ company's debt position. Is it$$ low, high, or about$$ average? What other information might help you to make a$$ decision?

The leverage ratio and debt ratio are

$$

high.

low.

The debt position is

$$

high.

low.

Other helpful information would be the

$$

budgeted gross profit margin

gross profit margin from prior years

leverage and debt ratios from prior years

the accounts receivable turnover ratios

and

$$

comparative ratios from competitors.

financial data from prior years.

gross profit margin from competitors.

pricing analysis from prior years.