Question

zhi rou's net worth is $50,000. her debt ratio is 0.5. her long-term assets total $90,000....

zhi rou's net worth is $50,000. her debt ratio is 0.5. her long-term assets total $90,000. and monthly expenses are $5,000. what is her liquidity ratio?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Debt Ratio= L/A, A= L+ E. Therefore, L= A-E

Where L= Liabilities, A= Assets and E= Equity.

Liquidity ratio of individuals= Cash assets/monthly expenses

Given, Debt Ratio= 0.5, Equity= $50,000

Hence,

(A-50000)/A =0.5

A-50000=0.5A

Assets A=50000/0.5= $100,000

Also given long term assets= $90,000 and monthly expenses= $5,000

Hence, Short term assets (or, cash assets)= $100,000-$90,000 = $10,000

Therefore, Liquidity ratio of Zhi Rou= Cash assets/monthly expenses= 10,000/5,000 = 2

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
Current assets = $140,000, net fixed assets = $370,000, long-term debt = $450,000, net working capital...
Current assets = $140,000, net fixed assets = $370,000, long-term debt = $450,000, net working capital = –$45,000. If liquidated, current assets will be sold for $120,000 and net fixed assets will be sold for $400,000. If repaid, both current liabilities and long-term debt will cost their book value. What is the market value of shareholders’ equity? A. Below –$110,000 B. Between –$110,000 and –$90,000 C. Between –$90,000 and –$70,000 D. Between –$70,000 and –$50,000 E. Between –$50,000 and –$30,000...
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term...
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .53 and a current ratio of 1.42. Current liabilities are $2,470, sales are $10,690, profit margin is 10 percent, and ROE is 15 percent.    What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)    Net fixed assets            $
The Acme Widget Company has a ratio of long-term debt-to-total assets of .40, D/E of .95...
The Acme Widget Company has a ratio of long-term debt-to-total assets of .40, D/E of .95 and a current ratio of 1.30. Current liabilities are $900, sales are $5,320, net profit margin is 9.4%, and ROE is 18.2%. What is the amount of the firm’s net fixed assets?
The Lecma Widget Company has a ratio of long-term debt-to-total assets of .40, D/E of .95...
The Lecma Widget Company has a ratio of long-term debt-to-total assets of .40, D/E of .95 and a current ratio of 1.30. Current liabilities are $900, sales are $5,320, net profit margin is 9.4%, and ROE is 18.2%. What is the amount of the firm’s net fixed assets?
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term...
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .43 and a current ratio of 1.27. Current liabilities are $2,395, sales are $10,465, profit margin is 11 percent, and ROE is 16 percent. What is the amount of the firm’s current assets? (Do not round intermediate calculations and your answer to 2 decimal places, e.g., 32.16.) What is the amount of the firm’s net income? (Do not round intermediate...
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term...
The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .55 and a current ratio of 1.44. Current liabilities are $2,480, sales are $10,720, profit margin is 12 percent, and ROE is 17 percent. What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Total Long-term liabilities = 2,434,664    Total Assets = 2,255,213 Long Term Debt to Total Assets =...
Total Long-term liabilities = 2,434,664    Total Assets = 2,255,213 Long Term Debt to Total Assets = Long-term Debt / Total Assets = 2434664 / 255213 ≈ 1.0796% 1. What range is generally considered good or acceptable for this measure? 2. Suppose this measure had been 6.3% significantly lower instead. How would this have changed your interpretation of the financial condition of the city?
long-term debt ratio = long-term debt/longterm debt + total equity Why this ratio might be of...
long-term debt ratio = long-term debt/longterm debt + total equity Why this ratio might be of interest to investors or creditors, what this ratio tells us and whether the company is performing better or worse to the prior fiscal year. --> F18 = 42% , F19 = 40%
Use the following information to calculate the value of Debt to tangible net worth ratio is:...
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.
The Lonesome Duck has net working capital of $620. Long-term debt is $4,320, total assets are...
The Lonesome Duck has net working capital of $620. Long-term debt is $4,320, total assets are $8,190, and fixed assets are $4,710. What is the amount of the total liabilities? A. $4,920 B. $8,050 C. $6,890 D. $7,180 E. $2,860
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT