Question: compute the following: Pause end 12 Transaction Net Stock Working Current Debt Net Ratio Ratio holders Capital Income Equity 10. A firm refinances short -

compute the following:

Pause end 12 Transaction Net Stock Working Current Debt Net Ratio Ratio holders Capital Income Equity 10. A firm refinances short - term notes with long-term notes. (Ignore interest) PROBLEM IV (15 Points) Instructions: Indicate the effect of each of the following transactions on the ratios listed. Use a "+" to indicate an increase, " - " to indicate a decrease, and "o" to indicate no effect. Assume an initial Times Interest Earned of 3.0 X, a Debt Ratio of 50% and a Debt- to- Worth of 1.0 X. Times Interest Debt Debt/ Transaction Earned Ratio Worth 1. Collection of accounts receivable. 2. Firm has decreasing profits due to rising cost of sales. 3. Firm appropriates Retained Earnings for expansion. 4. Issuance of pre- ferred stock. 5. Repayment of a short- term bank loan (consider interest) . 6. The stock is split two for 1. 7 . Purchase of equipment financed by a long- term note (consider interest) . 8. Company repurchases its own stock in the market. 1 1 1 1 1 1

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