Question
In: Finance
Given the selected financial statement data for KRJ Enterprises presented below, calculate the debt-to-capital ratio, using...
Given the selected financial statement data for KRJ Enterprises presented below, calculate the debt-to-capital ratio, using total financial debt in the numerator. Present your answer in percentage terms, rounded to two decimal places, e.g., 20.00%.
Cash $122
Short-term investments $209
Accounts receivable $438
Inventory $515
Other current assets $171
Fixed assets (net) $1,027
Intangible assets $205
Long-term investments $316
Total assets $3,052
Short-term debt $161
Current portion of long-term debt $57
Accounts payable $259
Accrued liabilities $232
Other current liabilities $140
Long-term debt $516
Other long-term liabilities $100
Total liabilities $1,322
Stockholders’ equity $1,611
Solutions
Expert Solution
The Debt to Capital ratio is widely used measure to determine the financial leverage of company. The calculation of this ratio is made by divinding the interest bearing debt obligation which may be either short term or long term with Total Capital.
Here Total Capital = Interest bearing Debt+ Shareholders equity
The reason why we take only interest bearing debt as numerator is that all debts don't put financial burden to an entity. For e.g. liabilities like Account Payable, accured liabilities donot carry interest obligations and hence donot impact the financial leverage of an entity.
Here calculation of Debt to Capital Ratio is as follow:
Calculation of Debt (only interest bearing debt to be considered and all other liability to be ignored):
| Particular | Amount |
| Short term Debt | 161 |
| Current Portion of Long term debt | 57 |
| Accounts Payable | - |
| Accured Liabilities | - |
| Other Current Liabilities | - |
| Long term Debt | 516 |
| Other Long term Liabilities | - |
| Total | $ 734 |
Calculation of Capital is as follow:
Capital = Interest bearing Debt + Equity
= 734+ 1611
= $ 2345
Debt to Capital Ratio = 734/2345
= 0.3130
=31.30%
jeff jeffy answered 2 years agoRelated Solutions
Selected financial statement data for KRJ Enterprises are listed below. Calculate the debt service coverage ratio....
Selected financial statement data for KRJ Enterprises are listed
below. Calculate the debt service coverage ratio. Present your
answer rounded to two decimal places. e.g. 20.00.
Sales $12,866
Cost of goods sold 9,015
Cash operating expenses 1,969
Depreciation and amortization expense 327
Interest expense 171
Tax expense 232
Footnotes report that $165 of lease expenses are included in
cash operating expenses, $21 of interest expenditures were
capitalized during the year, and $296 of debt was repaid during the
year.
Given the selected financial statement data presented below, calculate the Altman Z-score for KRJ Enterprises. From...
Given the selected financial statement data presented below,
calculate the Altman Z-score for KRJ Enterprises. From the balance
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$878 million, and total equity of $500 million, which includes
retained earnings of $370 million. From the income statement, sales
of $1,008 million, operating income (EBIT) of $322 million, and net
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Selected financial statement data for KRJ Enterprises are listed below, calculate the EBITDA coverage ratio. Present...
Selected financial statement data for KRJ Enterprises are listed
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rounded to two decimal places. e.g. 20.00.
Sales $12,341
Cost of goods sold 7,642
Cash operating expenses 2,168
Depreciation and amortization expense 359
Interest expense 184
Tax expense 220
Footnotes report that $239 of lease expenses are included in
cash operating expenses, $72 of interest expenditures were
capitalized during the year, and $4,387 of debt was repaid during
the year.
Selected financial statement data (in $ thousands) for KRJ Enterprises are listed below, calculate the interest...
Selected financial statement data (in $ thousands) for KRJ
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ratio. Present your answer rounded to two decimal places. e.g.
20.00. Sales $10,183
Cost of goods sold 5,676
Cash operating expenses 1,844
Depreciation expense 497
Interest expense 174
Tax expense 213
Footnotes report that $240 of lease expenses are included in
cash operating expenses, $26 of interest expenditures were
capitalized during the year, and $538 of debt was repaid during the
year.
Selected data from the financial statements of KRJ Manufacturing are presented below. Calculate the return on...
Selected data from the financial statements of KRJ Manufacturing
are presented below. Calculate the return on assets for the year,
presenting your answer in percentage terms, rounded to two decimal
places. e.g. 20.00%.
Sales $117,358
Gross profits $51,639
Operating profits (EBIT) $32,879
Earnings before taxes (EBT) $25,389
Net profits $24,739
Tax expense 8,000
Depreciation expense $13,207
Total assets, beg of year $80,302
Total assets, end of year $99,082
Total equity, beg of year $46,237
Total equity, end of year $53,675...
Selected data from the financial statements of KRJ Manufacturing are presented below. Calculate the gross profit...
Selected data from the financial statements of KRJ Manufacturing
are presented below. Calculate the gross profit margin, presenting
your answer in percentage terms, rounded to two decimal places.
e.g. 20.00%.
Sales $107,262
Cost of goods sold $51,727
Operating profits (EBIT) $32,852
Earnings before taxes (EBT) $28,308
Net profits $18,706
Tax expense 8,310
Depreciation expense $14,562
Total assets, beg of year $89,075
Total assets, end of year $83,449
Total equity, beg of year $42,951
Total equity, end of year $40,310
Cash...
Selected financial statement information and additional data for Johnston Enterprises is presented below. Johnston Enterprises Statement...
Selected financial statement information and additional data for
Johnston Enterprises is presented below.
Johnston Enterprises
Statement of Financial Position and Income Statement Data
December 31, December
31,
2019
2018
Property, Plant, and
Equipment
HK$1,241,000 HK$ 1,122,000
Less: Accumulated
Depreciation
(477,000)
(442,000)
764,000
680,000
Current Assets:
Inventory
391,000
340,000
Accounts
Receivable
238,000
306,000
Cash
154,000
119,000
Total Current
Assets
783,000
765,000
Total
Assets
HK$1,547,000 HK$1,445,000
Equity:
Share
Capital–Ordinary
HK$ 510,000 HK$...
Selected financial statement information and additional data for Johnston Enterprises is presented below: Johnston Enterprises Balance...
Selected financial statement information and additional data for
Johnston Enterprises is presented below:
Johnston Enterprises
Balance Sheet and Income Statement Data
December 31,
2017
December 31,
2016
Current Assets:
Cash
$170,300
$116,400
Accounts Receivable
226,300
306,200
Inventory
396,700
342,700
Total
Current Assets
793,300
765,300
Property, Plant, and Equipment
1,283,200
1,148,000
Less: Accumulated Depreciation
(460,400)
(429,100)
Total Assets
1,616,100
1,484,200
Current Liabilities:
Accounts Payable
$189,000
$100,700
Notes Payable
48,100
66,300
Income Taxes Payable
85,900
76,100
Total Current Liabilities
323,000
243,100
Bonds...
Selected financial statement information and additional data for Johnston Enterprises is presented below: Johnston Enterprises Balance...
Selected financial statement information and additional data for
Johnston Enterprises is presented below:
Johnston Enterprises
Balance Sheet and Income Statement Data
December 31,
2017
December 31,
2016
Current Assets:
Cash
$153,260
$117,200
Accounts Receivable
236,100
306,600
Inventory
397,700
343,800
Total
Current Assets
787,060
767,600
Property, Plant, and Equipment
1,271,200
1,136,000
Less: Accumulated Depreciation
(453,900)
(420,900)
Total Assets
1,604,360
1,482,700
Current Liabilities:
Accounts Payable
$189,800
$100,100
Notes Payable
50,100
66,500
Income Taxes Payable
84,700
75,100
Total Current Liabilities
324,600
241,700
Bonds...
Selected financial statement information and additional data for Johnston Enterprises is presented below Johnston Enterprises Balance...
Selected financial statement information and additional data for
Johnston Enterprises is presented below
Johnston Enterprises
Balance Sheet and Income Statement Data
December 31, December
31,
2017
2016___
Current Assets:
Cash
$153,000
$119,000
Accounts
Receivable
238,000
306,000
Inventory
391,000
340,000
Total Current
Assets
782,000
765,000
Property, Plant, and
Equipment
1,241,000
1,122,000
Less: Accumulated
Depreciation
(476,000)
(442,000)
Total
Assets
$1,547,000
$1,445,000
Current Liabilities:
Accounts
Payable
$187,000
$102,000
Notes
Payable
51,000
68,000
Income Taxes
Payable ...
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