OPoole Corporation develops and markets a harness in which a baby may be placed to bounce up and down. OPoole is considering approaching the bond market to raise funds to support the expansion of its manufacturing facility in order to meet the growing demand for the baby harness. The following is an extract from OPoole’s statement of financial position:

Required 

a. OPoole’s management would like you to determine the company’s debt to equity ratio and net debt as a percentage of capitalization ratio for 2023 and 2024 as it is considering approaching the bond market. 

b. How much debt is OPoole capable of issuing while remaining compliant with a debt to equity ratio of 0.75:1?

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OPOOLE CORPORATION Statement of Financial Position (in thousands) Current assets Cash Trade receivables Inventories Total current assets Non-current assets Property, plant, and equipment Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Current portion of warranty liability Current portion of long-term debt Total current liabilities Non-current liabilities December 31, 2024 $ 65,000 865,000 500,000 1,430,000 1,190,000 1,075,000 2,265,000 $3,695,000 $ 25,000 150,000 85,000 260,000 December 31, 2023 $ 85,000 770,000 300,000 1,155,000 1,375,000 1,275,000 2,650,000 $3,805,000 $ 35,000 175,000 95,000 305,000