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Austin Enterprises had Total Current Assets of $2,820,000 in 2018 and $3,396,000 in 2019
Austin Enterprises had Total Current Assets of $2,820,000 in 2018 and $3,396,000 in 2019. Total Current Liabilities were $2,169,000 in 2018 and $2,376,000 in 2019. Total Assets were $7,477,000 in 2018 and $8,328,000 in 2019.
a) What was the change in net working capital from 2018 to 2019?
b) If the company had Long-Term Debt of $1,950,000; Shareholders Equity of $2,835,000; and Total Assets of $8,328,000. What was the company's ratio of long-term debt to capital?
Expert Solution
a
Change in current assets = 3396000-2820000 =576000
Change in current liabilities = 2376000-2169000 =207000
Change in working capital =Change in current assets-Change in current liabilities
=576000-207000 =369000
b
long-term debt to capital = Long-Term Debt/(debt+equity)
=1950000/(1950000+2835000) =40.75 = 0.41x
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