1. (Related to Checkpoint 4.2 on page 86) (Capital structure analysis) The liabilities and ownersAc€?c equity for Campbell Industries is found below:
Accounts payable $ 453,000
Notes payable 248,000
Current liabilities $ 701,000
Long-term debt $1,213,000
Common equity $5,477,000
Total liabilities and equity $7,391,000
What percentage of the firmAc€?cs assets does the firm finance using debt (liabilities)? (round to one decimal place)
If Campbell was to purchase a new warehouse for $1.5 million and finance it entirely with long term debt, what would be the firmAc€?cs new debt ratio?
The fraction of the firmAc€?cs assets that the firm finances using debt is ___% (Round to one decimal place).