Predator Punks Inc. has current assets of $14,000, net fixed assets of $32,500, current...

Question:

Predator Punks Inc. has current assets of $14,000, net fixed assets of $32,500, current liabilities of $13,400, and long-term debt of $16,800.

a. What is the value of the shareholder's equity account for this firm?

b. How much is net working capital?

Capital Structure:

In finance, capital structure refers to the composition of debts versus equities in financing a firm's total assets. One commonly used statistics that describes a firm's capital structure is the debt-equity ratio. A firm's capital structure can have important implications for its cost of capital and firm value.

Answer and Explanation:

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a. Shareholder's equity is $16,300.

Shareholder's equity is total assets minus total liabilities, i.e.,

  • shareholder's equity = total asset - total...

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How to Calculate Net Working Capital: Definition & Formula

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Chapter 5 / Lesson 22
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To operate effectively, businesses must be able to pay their bills as they become due. The best way to determine a business' ability to pay its bills is to calculate its net working capital. Learn what net working capital is and how to calculate it in this lesson.


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