The Morris Company has a Long-Term Debt OF $1,841.32 and a current ratio of 1.30. Current...

The Morris Company has a Long-Term Debt OF $1,841.32 and a current ratio of 1.30. Current Liabilities are $955, sales are $7,210, the profit margin is 8.3%, and ROE is 17.5 percent. What is the amount of the Firm's net fixed assets?

Expert Solution

Current ratio=Current assets/Current liabilities

Current assets=(1.3*955)=$1241.5

Profit margin=Net income/Sales

Net income=7210*8.3%

=$598.43

ROE=net income/equity

equity=598.43/0.175

=$3419.6

Total liabilities+Total equity=Current liabilities+Long term debt+equity

=955+1841.32+3419.6

=$6215.92

Total assets=Total liabilities+Total equity =$6215.92

Total assets=current assets+net fixed assets

net fixed assets=$6215.92-1241.5

=$4974.42

jeff jeffy answered 2 years ago

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