1) Nelson Sheet Metal Company has present assets of $2.5 million and present liabilities of $1.0 million. Firm is in necessitate of extra inventory and has the opportunity to have a loan of money on a short-term note with which it can purchase the required material. Though, a earlier financing agreement prohibits company from operating with the present ratio below 1.8. Find out the maximum amount of inventory Nelson can attain in this manner. The note will be present liability and purchased inventory will be a present asset of same size, X. Form limiting present ratio in terms of X and solve .
2) Cookies Inc. has the ratios given below:
ROE = 15%
T/A turnover = 1.2
ROS = 10%
Find out the percentage of its assets that are financed by equity?