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What would be the firm new debt ratio

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Reference no: EM133028241

Question - The liabilities and owners' equity for Campbell Industries is found here:

Accounts payable $456,000

Notes payable $256,000

Current liabilities $712,000

Long-term debt $1,296,000

Common equity $5,259,000

Total liabilities and equity $7,267,000

Required -

a. What percentage of the firm's assets does the firm finance using debt (liabilities)?

b. If Campbell were to purchase a new warehouse for $1.2 million and finance it entirely with long-term debt, what would be the firm's new debt ratio?

Reference no: EM133028241

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