Fields, Incorporated, has the following book value balance sheet: Total Debt and Equity Assets Current assets $130,000,000 Net fixed assets Total assets 325,000,000 a. Debt-equity ratio b. Debt-equity ratio $455,000,000 Total debt Equity Common stock Capital surplus Accumulated retained earnings Total shareholders' equity Total debt and shareholders' equity $ 220,000,000 $ 40,000,000 75,000,000 120,000,000 times times $ 235,000,000 a. What is the debt-equity ratio based on book values? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. Suppose the market value of the company's debt is $221.5 million and the market value of equity is $675 million. What is the debt-equity ratio based on market values? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) $ 455,000,000

Fields, Incorporated, has the following book value balance sheet: Total Debt and Equity Assets Current assets $130,000,000 Net fixed assets Total assets 325,000,000 a. Debt-equity ratio b. Debt-equity ratio $455,000,000 Total debt Equity Common stock Capital surplus Accumulated retained earnings Total shareholders' equity Total debt and shareholders' equity $ 220,000,000 $ 40,000,000 75,000,000 120,000,000 times times $ 235,000,000 a. What is the debt-equity ratio based on book values? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. Suppose the market value of the company's debt is $221.5 million and the market value of equity is $675 million. What is the debt-equity ratio based on market values? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) $ 455,000,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 49E

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