Muffin's Masonry, Inc

Finance Dec 19, 2020

Muffin's Masonry, Inc.'s, balance sheet lists net fixed assets as $24.00 million. The fixed assets could currently be sold for $39.00 million. Muffin's current balance sheet shows current liabilities of $10.50 million and net working capital of $9.50 million. If all the current accounts were liquidated today, the company would receive $7.75 million cash after paying the $10.50 million in current liabilities. What is the book value of Muffin's Masonry's assets today and the market value of these assets?

Expert Solution

Assets value= current assets + net fixed assets
Current assets= net working capital + current liabilities

Book Value

Current assets = 9.5 +10.5 = $ 20 million

Book value= 20+24 = $44 million

Market value

Current assets= 7.75+ 10.5= $18.25 million

Market value=39 + 18.25= $57.25 million

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