11. Softer Lig hts, Inc. has provided the following information for its most rec

Question

11. Softer Lig hts, Inc. has provided the following information for its most recent year of operation. Net income was $316,500, fixed assets are $876,400, current assets equal was $434,000, and equity is $578,600. What is the debt ratio for Softer Lights? A, more than 47.25% B. more than 42.50% but less than 47.25% C. more than 37.75% but less than 42.50% D. more than 31.00% but less than 37.75% E. less than 31.00% current liabilities equal $198,360, EBIT 12. Last year, a firm had net income of $216,560, liabilities of $564,200 and equity of 347,500. The firm paid out $132,600 in dividends. What is the firm's internal growth rate? A. more than 14.00% B. more than 12.76% but less than 14.00% C. more than 1 1.48% but less than 12.76% D. more than 10.24% but less than 11.48% E. less than 10.24%

Explanation / Answer

Q11. Answer is A. more than 47.25% Explanation: Total assets (876400+239450) 1115850 Less: Equity 578600 Debt 537250 Debt ratio= Debts/ Total assets 537250 /1115850 *100 = 48.15% Q12. Answer is E. Less than 10.24% Explanation: Net income 216560 Lless: Dividend paid 132600 Reinvested earnings 83960 Total assets (564200+347500) 911700 Internal Growth rate = Reinvested earnings / Total assets 83960/911700*100 = 9.21%

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