Question

The top management of Murphee Marketing Services examines the following company accounting records at August 29, immediately before the end of the year, August 31:
Total current assets..................... $ 324,500
Noncurrent assets........................ 1,098,500
$1,423,000
Total current liabilities................ $ 173,800
Noncurrent liabilities.................. 247,500
Stockholders’ equity.................... 1,001,700
$1,423,000
1. Suppose Murphee’s management wants to achieve a current ratio of 2. How much in current liabilities should Murphee pay off within the next two days in order to achieve its goal?
2. Calculate Murphee’s leverage ratio and debt ratio. Evaluate the company’s debt position. Is it low, high, or about average? What other information might help you to make a decision?



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  • CreatedJuly 25, 2014
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