Calculate the debt ratio before and after bank loan

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Reference no: EM1364161

Magic City Steel Enterprises has current assets of $160,000, total assets of $200,000, current liabilities of $85,000, and total liabilities of $100,000. The company is trying to negotiate a bank loan of $75,000. The terms of the loan require repayment over two years and state that the debt ratio cannot exceed .60. Calculate the debt ratio before and after the bank loan. Do you think the loan will be granted?

Reference no: EM1364161

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