-Part3-Capital Structure: Use the following inf XyZ Corp, has current assets of
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Question
-Part3-Capital Structure: Use the following inf XyZ Corp, has current assets of $21,000 and total asset of 3and other on market price including short-term debt of $2,000, long term debt of $1 $1,000. The company has 1,000 shares of common stock share. PLEASE SHOW ME YOUR WORK: information to answer questions 6-10 current liabilities of $16,000 $10,000 and other long-term obligations of 6.Operating liabilities . Financing liabilities (Debt) 8.Total liabilities Total Equity (book value) $30,000 Total Assets 10. Total Invested Capital at Market ValueExplanation / Answer
Operating Liabilities: Operating Liabilities are short term liabilities used for day to day operation of the business. They are normally non interest bearing liabilities like accounts payable, outstanding expenses, and income tax payable.
Operating Liabilities = Current liabilities – Short term Debt
= $16,000 - $2,000
= $14,000
Financing Liabilities = Long term debt + Other long term Obligations + Short term debt
= $10,000 + $1,000 + $2,000
= $13,000
Total liabilities: Total liabilities means all the long term and short term debt that is equal to the sum of operating liabilities and financing liabilities
Total Liabilities = Operating Liabilities + Financing Liabilities
= $14,000 + $13,000
= $27,000
Total Equity (book value): Total equity is the owned capital of the company. This is the amount brought by the owners of the company
Total Equity = Total Assets – Total Liabilities
= $30,000 - $27,000
= $3,000
Total Assets: $30,000
Total Invested Capital at Market value: Total invested capital is the amount of capital that floats in the market. It is priced at the market value.
Total invested capital at Market Value = Market price*number of outstanding shares
Total Invested Capital at Market Value = 1000*$9
=$9,000
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