Question

Use the following information to calculate the value of Debt to tangible net worth ratio is: Stockholders' equity 1,800,000, Current assets 1,870,000,Tangible assets, net 1,600,000Intangible assets 40,000, Investments 120,000, Other assets 90,000.

Answer 1

Debt to Tangible Net Worth Ratio = Total Liabilities ÷ (Stockholders’ Equity - Intangible Assets)

Here

Tota Liabilities	19,20,000
Stockholders' equity	18,00,000
Intangible assets	40,000
Debt to Tangible Net Worth Ratio =	1.09	1920000/(1800000-40000)
or	109.09%

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Workings:

Stockholders' equity	18,00,000	Current assets	18,70,000
		Tangible assets, net	16,00,000
Tota Liabilities	19,20,000	Intangible assets	40,000
(3720000-1800000)		Investments	1,20,000
		Other assets	90,000.00
Total liabilities and Stockholders Equity	37,20,000	Total Assets	37,20,000

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Hope you ynderstood.

Thank you.