Making a Loan

L.L. Sams Company Balance Sheet as of August 31, 20X4 is shown below:

Cash $9,000 Accounts Payable $12,000

Accounts Receivable $14,000 Note Payable $18,000

Merchandise Inv. $85,000 Total Liabilities $30,000

Building $80,000 Owner's Equity $181,500

Total assets $211,500 Liab. & Equity $211,500

Analysis provides the following information: Current assets are $108,000. Current liabilities are $30,000. The current ratio is 3.6 to 1. The quick ratio is .7667 to 1. Total liabilities are $30,000 and equity is $181,500 so the company has a debt to equity ratio of .1653 to 1. This Balance Sheet provides only limited information about L.L

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Category: Economics - M