USA: +1 (725) 712-1730 
Sign in
Pearce’s has a long- term debt ratio of .45 and a current ratio of 1.25. Current liabilities are $ 875 sales are $ 5,780 profit margin is 9.5 % and ROE is 18.5%. What is the amount of net fixed asset.
Expert Answer
Answer- Current Assets = Current liabilities x Current ratio
= 875 x 1.25 = 1094
Return= Sales x Net Income
= 5780 x 0.095= 549
Equity= Return/ R/E
= 549/0.185= 2968
Debt= Equity X D/E
= 2968 x 0.45= 1336
Asset= Debt+ Equity
= 2968+1336= 4304
Fixed Asset= Assets – Current Asset
= 4304- 1094= 3210
