MODULE 4-SLP

Module 4 - SLP

Module 4 - SLP

The capital structure decision and the cost of capital

Ratio Calculations & Recommendations

Debt Ratios

 

 

 

2010

2009

 

 

 

 

 

 

 

Total Debt Ratio

=

Total Liabilities

 

 

0.36

=

$27,392,000

 

0.33

=

$15,861,000

 

 

Total Assets

 

 

$75,183,000

 

$47,501,000

 

 

 

 

 

 

 

 

 

 

 

Debt/Equity Ratio

=

Total Liabilities

 

 

0.57

=

$27,392,000

 

0.50

=

$15,861,000

 

 

Owners' Equity

 

 

 

 

$47,791,000

 

 

 

$31,640,000

Debt Ratios

 

 

 

2010

2009

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt Ratio

=

Short-term Liabilities

 

 

0.28

=

$20,722,000

 

0.24

=

$11,506,000

 

 

Total Assets

 

 

$75,183,000

 

$47,501,000

 

 

 

 

 

 

 

 

 

 

 

 

Debt/Equity Ratio

=

Short-term Liabilities

 

 

0.43

=

$20,722,000

 

0.36

=

$11,506,000

 

 

Owners' Equity

 

 

 

 

$47,791,000

 

 

 

$31,640,000

Debt Ratios

 

 

 

2010

2009

 

 

 

 

 

 

 

 

 

 

 

Total Debt Ratio

=

Long-term Liabilities

 

 

0.09

=

$6,670,000

 

0.09

=

$4,355,000

 

 

Total Assets

 

 

$75,183,000

 

$47,501,000

 

 

 

 

 

 

 

 

 

 

 

 

Debt/Equity Ratio

=

Long-term Liabilities

 

 

0.14

=

$6,670,000

 

0.14

=

$4,355,000

 

 

Owners' Equity

 

 

 

 

$47,791,000

 

 

 

$31,640,000

From knowing to what extent the various funding sources to help finance various assets, it is also necessary to know how they are structured the financing sources of the company. That is, how they relate to each other borrowed funds, permanent resources and equity of it ...