Refer to the data for Pennewell Publishing Inc. (PP). Assume that PP is considering changing from its original capital structure
1 answer:
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Answer:
correct option is B. 1.40
Explanation:
given data
total assets = $689,400
long-term debt = $198,375
total equity = $364.182
net fixed assets = $512,100
sales = $1,021,500
profit margin = 6.2 percent
solution
we get here first current assets that is express as
current assets = Total assets - net fixed assets ...................1
put here value
current assets = $689,400 - $512,100
current assets = $177300
and now we get Current liabilities that is express as
Total liabilities = Total assets - Total equity .............2
Current liabilities + Long term debt = Total assets - Total equity
Current liabilities = Total assets - Total equity - Long term debt ...........3
put here value
Current liabilities = $689400 - $364182 - $198,375
Current liabilities = $126843
so here Current ratio will be
Current ratio = current assets ÷ Current liabilities .............4
Current ratio =
Current ratio = 1.40
so correct option is B. 1.40