Question

Samantha Knight is applying for a small-business loan. She provided the bank with the following information:...

Samantha Knight is applying for a small-business loan. She provided the bank with the following information: cash in checking accounts: $5,000; cash in savings: $10,350; home market value: $145,500; first mortgage on house: $25,000; home equity loan limit: $70,000; home equity loan: $10,000; automobile market value: $19,000; automobile loan outstanding: $15,000; and credit card debt: $1,500.

Calculate the debt-to-asset ratio.
Calculate the debt-to-equity ratio.
Please provide the formula for each ratio in addition to your answers.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Assets = cash in checking accounts +cash in savings + home market value+ automobile market value

=> 5000+10350+145500+19000 =179850

Liabilities = first mortgage on loan + home equity loan+ auto mobile loan outstanding + credit card debt

25000+10000+15000+1500 =51500

Share holders equity = Assets - outsideliabilities

= 179850 - 51500

= 128350

debt-to-asset ratio = ( short term debt+ long term debt)/ Total Assets

= 51500/179850

= 0.29

debt-to-equity ratio = total liabilities / share holders eauity

= 51500/128350

= 0.40

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Sam buys a house in 2000 for $75,000. He inherits some money in 2001, and pays...
Sam buys a house in 2000 for $75,000. He inherits some money in 2001, and pays off his mortgage loan right away. He continues to live in the house, and it goes up in value to $250,000. Sam decides to take some of his equity out of the house, so in 2019 he gets a mortgage on the house for $200,000, which he invests in the stock market. His stock investments go down in value, and he gets no dividends...
Tropical, Inc. has provided the following financial information in its application for a loan. Assets Liabilities...
Tropical, Inc. has provided the following financial information in its application for a loan. Assets Liabilities and Equity ___________________________________________________ Cash $ 20 Accounts Payable $ 30 Accounts Receivables $ 90 Notes Payable $ 90 Inventory $ 90 Accruals $ 30 Long Term Debt $150 Plant and equipment $500 Equity $400 ----------------------------------------------------------------------------------- Also assume sales = $500, cost of goods sold = $360, taxes = $56, interest payments = $40, net income = $44, the dividend payout ratio is 50%, and...
1- Please use the information for this question and the following. A- A bank is considering...
1- Please use the information for this question and the following. A- A bank is considering two securities: a 30-year Treasury bond yielding 7% and a 30-year municipal bond yielding 5%. If the bank's tax rate is 30%, what is the tax-equivalent yield of the municipal bond? Please express as a %. B- Which bond gives the investor a better tax-equivalent yield? 2- Please use the information in this question for the next four questions, including this one. Below is...
First, you could build an office building on the site. You’ve spoken with a broker who...
First, you could build an office building on the site. You’ve spoken with a broker who tells you that you can expect to earn around $60 /sf/year on new office space in the market. The site is currently zoned for residential, but the city has granted variances to nearby parcels allowing for office development. You’re optimistic that the city will grant you a similar variance allowing a 25,000 sf office building on your lot. You’ve spoken to a banker who...
PLEASE ANSWER C!!! Bob & Betty Homebuyers want to make an offer on this property at...
PLEASE ANSWER C!!! Bob & Betty Homebuyers want to make an offer on this property at the list price. Bob earns $48,000 per year and Betty earns $54,000 per year. They have very good credit. Their monthly payments are $200 for student loans, $350 for their car payment and minimum credit card payment of $50. They have savings of $125,000. The balance of their student loans is $40,000. Insurance on this house will cost them $900 per year. Property taxes...
You and your spouse purchased your first home immediately after the birth of your child. You...
You and your spouse purchased your first home immediately after the birth of your child. You have lived in the home for the past 18 years, paying your mortgage on time, but otherwise struggled to accumulate savings to pay for college. Your child is off to college this fall and annual cost is estimated to be $70,000. You originally paid $450,000 for your house, which has appreciated in price at 3.5% per annum. The original mortgage was a 30 year...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2020, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund...
Trying to calculate current ratio which is liquid assets/current liability. Which of the below items would...
Trying to calculate current ratio which is liquid assets/current liability. Which of the below items would be included under each? 2011 Camry worth about $11,000, with a bank loan balance of $3,000 2012 Volvo S60 worth about $15,000, with a bank loan balance of $10,000 An insurance policy on Jeff's life with a face value of $100,000 and no cash surrender value. Mary is the beneficiary listed on Jeff's policy. An insurance policy on Mary's life with a face value...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2018, John worked as a computer technician at a local university earning a salary of $154,200, and Sandy worked part-time as a receptionist for a law firm earning a salary of $31,200. John also does some Web design work on the side and reported revenues of $6,200 and associated expenses of $1,850. The Fergusons received $1,240 in qualified dividends and a $310 refund of...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In...
John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2019, John worked as a computer technician at a local university earning a salary of $152,300, and Sandy worked part-time as a receptionist for a law firm earning a salary of $29,300. John also does some Web design work on the side and reported revenues of $4,300 and associated expenses of $900. The Fergusons received $860 in qualified dividends and a $215 refund of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT