1. What is Cove Farms\' net worth/owner equity as of September 16, 2017? 2. How
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Question
1. What is Cove Farms' net worth/owner equity as of September 16, 2017?
2. How much working capital does Cove Farms have as of September 16, 2017
3. What is Cove Farms' current ratio?
4. What is the debt/asset ratio?
5. What is the debt/equity ratio?
6. What is the equity/ asset ratio?
7. Show the debt/asset and equity/asset ratios sum to 1.
8. what are the weakest part of the financial condition? why?
9. Cove Farms wants to borrow $6,000 from Bank LLC to buy new machinery, which will cost $6,000. Assume the loan is made and the machinery is purchased.
A. What will Cove Farm's net worth/equity be the fay the transactions are completed?
B. What will the debt/asset ratio be after the transactions are completed?
10. If you are the loan office at Bank LLC would you lend Cove Farms the money based on the farm's balance sheet?
BALANCE SHEET Cove Farms 16-Sep-17 FARM ASSETS FARM LIABILITIES Curreat Assets Cliquid within 12 month) Farm cash/checking/savings Accounts receivable Crop and feed invent Market livestock (raised& purchased) $1,789 S3.572 ory(growingandstred) -S10985 Current Liabilities (due within 12 months) Accounts payable *Accrued (unpaid) interest not included above $4,985 - ncome taxes and Social Security taxes payable $275 $500 $8301 Principal due within 12 mos. on long-term debt 550 Operating loan principal balance inventory Farm supplies on hand Prepaid expenses $5,239 $2,455 $2,455 Operating loan principal balance Other farm products on hand for sale Farm products stored for personal use $375 Short-term loan principal balance Short-term loan principal balance Principal due within 12 mos. on intermediate debt Other current liabilities (describe) $2,274 Other current assets (describe) Total Current Assets $21,056 Total Current Liabilities S15,228 Intermediate Assets (held 1 to 10 years avg.) Intermediate Liabilities (due 1 to 10 yrs. avg) Raised breeding livestock Purchased breeding livestock Farm machinery Farm equipment Farm vehicles Book value of capital lease(s) Other intermediate assets (describe) Total Intermediate Assets S50,000 Intermediate loan principal balance Intermediate loan principal balance $125,000 Intermediate loan principal balance $2,000 Intermediate loan principal balance $3,750 Intermediate loan principal balance S69,221 $20,007 $5,982 Capital lease payments due (discount for interest) Other intermediate liabilities (describe) Total Intermediate Liabilities $180,750 S95,210 Long-term Assets Farmland Farm buildings and Farmhouse Long-term Liabilities $150,775 Long-term loan principal balance $45,777 | Long-term loan principal balance $125,000 Long-term loan principal balance S121,250 $149,006 vements Other long term assets (describe) Other long-term liabilities (describe) $270,256 Total Long-term Assets $321,552 Total Long-term LiabilitiesExplanation / Answer
Total Current Assets 21056 Total Current Liabilities 15228 Total Intermediat Assets 180750 Total Intermediat Liabilities 95210 Long Term Assets 321552 Long Term Liabilities 270256 Total Asset 523358 Total liabilities 380694 1 Cove Farms Net worth Total Assets-Total Liabilities 523358-380694 $ 142664 2 Working Capital Total Current Assets-Total Current Liabilitities (Both liquid/due in one year) 21056-15228 $ 5828 3 Current Ratio Current Assets/Current Liabilities 21056/15228 1.38 4 Debt to Asset Ratio Total Debt/Total Assets 380694/523358 0.72 5 Debt to Equity Ratio Total Debt/Equity 380694/142664 2.67
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