Stone Walls has a long-term debt ratio of .6 and a current ratio of 1.2. Current liabilities are $800, sales are $7,800, the profit margin is 6.5 percent, and return on equity is 15.5 percent. What is the amount of the firm's net fixed assets?

The answer is $8017.43

Explanation:

current ratio = current assets/current liabilities=1.2*800=$960

Net income = 0.65* 7800=$507

return on equity = net income/ total equity=507/0.155=$3270.97

Long term  debt ratio= Long term  debt /( Long term  debt + total equity)

0.6= Long term  debt / Long term  debt + $3270.97 = $4906.46

Total debt= 800+ 4906.46= $5706.46

Total assets = $5706.46 + $3270.97 = $8977.43

Net fixed assets= $8977.43- $960= $8017.43

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