Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Weatherford Industries Inc. has the following ratios: A0/S0 = 1.6, L0/S0 = 0.4; profit margin =0.10; and retention ratio = 55%. Sales last year were

Weatherford Industries Inc. has the following ratios: A0/S0 = 1.6, L0/S0 = 0.4; profit margin =0.10; and retention ratio = 55%. Sales last year were $100M. Assuming that these ratios remain constant:Suppose 40% of the companys present asset holdings is fixed asset while the remainder are all current assets which increase proportionately with sales. If the company is not yet operating at full capacity and an additional 15% of sales increase next year can be ably absorbed by the slack capacity, what is projected total asset amount next year? Express your answer in millions and use four decimal places in your computation and answer.

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

Step: 3

blur-text-image

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

Financial Markets and Institutions

Authors: Anthony Saunders, Marcia Cornett

6th edition

9780077641849, 77861663, 77641841, 978-0077861667

More Books

Students also viewed these Finance questions

Question

=+ 6. A Case Study in this chapter concludes that if

Answered: 1 week ago