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I think that it is 60% 24+16 =40 100-40 = 60 that is my guess I think that it is 60% 24+16 =40 100-40 = 60 that is my guess

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Q: What is the proportion of debt financing for a firm that expects a 24 return on equity a 16 return on assets and 12 return on debt Ignore the taxes?
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Difference between permanent current assets and temporary current assets?

permanent asset should be financed with permanent and spontaneous sources of financing,while temporary assets should be financed with temporary sources of financing.


What is maturity matching approach?

Hedge risk by matching the maturities of assets and liabilities. Permanent current assets are financed with long-term financing, while temporary current assets are financed with short-term financing. There are no excess funds.


How would a business acquire assets financing?

To acquire asset financing, a business needs to speak to someone at a financial institution such as a bank. There, an adviser can determine if financing is possible.


Working capital management is primarily concerned with the management and financing of?

Current assets.


Formula for net operating assets?

Get the balance sheet and sererate any financing activities from the operating activities. Financing activities are anything that is interest-bearing like debt, equity investments etc and not part of the business' everyday operations. The reformatted balance sheet should look like this: Operating Activities: Current Assets - Current Liabilities = Net Current Assets + Non Current Assets - Non Current Liabilities = NET OPERATING ASSETS - Financing activities (Net Financial Obligations) = Equity Cash is not an operating asset so the basic equation is: Total Assets - Cash = Operating Assets Total Liabilities - LTD - Current LTD = Operating Liabilities NOA = Operating Assets - Operating Liabilities

Related questions

Difference between on balance sheet financing and off balance sheet financing?

In off-balance sheet financing assets are not shown in balance sheet while in balance sheet financing fixed assets shown in balance sheet.


How you can combine liability structure and current assets decision?

The level of current assets and method of financing those assets are interdependent.A conservative policy of "high" level of current assets allows a more aggressive method of financing current assets.A conservation method of financing ( all- equity) allows an aggressive policy of "low" levels of current assets.


Why lease financing is off-balance sheet financing?

Operating lease is a off-balance sheet financing because in operating finance company don't buy the assets but even then it enjoys to use the assets which helps the management to improve return on total assets as net income increased but no assets show in balance sheet.


Difference between permanent current assets and temporary current assets?

permanent asset should be financed with permanent and spontaneous sources of financing,while temporary assets should be financed with temporary sources of financing.


A firm that uses short-term financing methods for a portion of permanent current assets is assuming more risk but expects higher returns than a firm with a normal financing plan. Explain.?

By establishing a long-term financing arrangement for temporary current assets, a firm is assured of having necessary funding in good times as well as bad, thus we say there is low risk. However, long-term financing is generally more expensive than short-term financing and profits may be lower than those which could be achieved with a synchronized or normal financing arrangement for temporary current assets


What is maturity matching approach?

Hedge risk by matching the maturities of assets and liabilities. Permanent current assets are financed with long-term financing, while temporary current assets are financed with short-term financing. There are no excess funds.


How would a business acquire assets financing?

To acquire asset financing, a business needs to speak to someone at a financial institution such as a bank. There, an adviser can determine if financing is possible.


Working capital management is primarily concerned with the management and financing of?

Current assets.


What is the significance of working capital management to match sales and production?

If sales and production can be matched, the level of inventory and the amount of current assets needed can be kept to a minimum; therefore, lower financing costs will be incurred. Matching sales and production has the advantage of maintaining smaller amounts of current assets than level production, and therefore less financing costs are incurred. However, if sales are seasonal or cyclical, workers will be laid off in a declining sales climate and machinery (capital assets) will be idle. Here lies the tradeoff between level and seasonal production: Full utilization of capital assets with skilled workers and more financing of current assets versus unused capacity, training and retraining workers, with lower financing for current assets.


What is current assets to total assets ratio?

Current asset to total asset ratio shows how much is the proportion of current asset with comparison to total assets of business.


What financing alternative has the highest preference of payment in a case where the company liquidates its assets?

bonds


Assets equal liabilities?

Yes assets are equal to liabilities. As liabilities are source of financing either inform of equity or inform of debt. With help of liabilities (equity+debts) assets are financed.