(All Steps) (Calculating debt ratio) Fast Solutions, Inc. has the following financial structure: Accounts payable $ 500,000 Short-term debt 250,000 Current
Question: (Calculating debt ratio) Fast Solutions, Inc. has the following financial structure:
| Accounts payable | $ 500,000 |
| Short-term debt | 250,000 |
| Current liabilities | $ 750,000 |
| Long-term debt | 750,000 |
| Shareholders’ equity | 500,000 |
| Total | $2,000,000 |
- Compute Fast’s debt ratio and interest-bearing debt ratio.
- If the market value of Fast’s equity is $2,000,000 and the value of the firm’s debt is equal to its book value, assuming excess cash is zero, what is the debt-to-enterprise-value ratio for Fast?
- If you were a bank loan officer who was analyzing whether or not to loan more money to Fast, which of the ratios calculated in parts a and b is most relevant to your analysis? Why?
Price: $2.99
Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document 