Question
In: Finance
Haliburton's financial statements indicate that the company'scurrent assets equal 20 million and 60% of its...
Haliburton's financial statements indicate that the company's current assets equal 20 million and 60% of its assets are financed with common equity, its current ratio is 5.0, total asset turnover is 6.0, and sales equal $900 million.
What is Haliburton's current liabilities?
What is the dollar amount of Haliburton's assets that are financed with debt?
Solutions
Expert Solution
Current Assets = $20 million
Current ratio = 5.0
- Current ratio = Current Assets/Current Liabilities
5.0 = $20 million/Current Liabilities
a). Current Liabilities = $4 million
b). Total Assets Turnover = Net sales/Total Assets
6 = $900 million/Total Assets
Total Assets = $150 million
- 60% of Assets are finance from equity which means that other 40% are financed with debts.
Total Assets financed with debt = Total Assets*40%
= $150 million*40%
Total Assets financed with debt = $60 million
SO, the dollar amount of Haliburton's assets that are financed with debt is $60 million
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