Refer to the Following Selected Financial Information from Frankle Corp

question 151

Multiple Choice

Refer to the following selected financial information from Frankle Corp. Compute the company's current ratio. $$\begin{array} { | l | r | } \hline & \\\hline \text { Current assets } & 306,450 \\\hline \text { Plant assets } & 388,000 \\\hline \text { Current Liabilities } & 107,800 \\\hline \text { Net sales } & 676,000 \\\hline \text { Net Income } & 75,000 \\\hline\end{array}$$

• A) 6.44.
• B) 2.84.
• C) 6.27.
• D) 3.60.
• E) 1.44.

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Definitions:

Homemade Leverage

The use of personal borrowing to adjust the overall level of financial leverage that an individual utilizes in their investments.

Capital Structure

Describes the mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, used to finance its overall operations and growth.