Current assets $ 3,416.3 Interest expense $ 473.2 Total assets 30,224.9 Income taxes 1,936 Current liabilities 2,988.7 Net income 4,551.0 Total liabilities 16,191.0

Suppose the notes to McDonald's financial statements show that subsequent to 2014 the company will have future minimum lease payments under operating leases of $10,715.5 million. If these assets had been purchased with debt, assets and liabilities would rise by approximately $8,800 million. Recompute the debt to assets ratio after adjusting for this. (Round to 0 decimal places, e. g. 62%.)

Question

Jenna Barton

Business

24 December, 01:42

Current assets $ 3,416.3 Interest expense $ 473.2 Total assets 30,224.9 Income taxes 1,936 Current liabilities 2,988.7 Net income 4,551.0 Total liabilities 16,191.0

Suppose the notes to McDonald's financial statements show that subsequent to 2014 the company will have future minimum lease payments under operating leases of $10,715.5 million. If these assets had been purchased with debt, assets and liabilities would rise by approximately $8,800 million. Recompute the debt to assets ratio after adjusting for this. (Round to 0 decimal places, e. g. 62%.)

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Chance Mueller · Answer 1

The Recomputed debt to assets ratio after adjusting for this is 64%

Explanation:

total assets before adjustments = $30,224.90

total assets after adjustments = $30,224.90 + $8800

= $39024.9

total liabilities before adjustments = $16191

total liabilities after adjustments = $16191 + $8800

= $24991

Debt to assets ratio after adjustments

= total liabilities after adjustments/total assets after adjustments

= $24991/$39024.9

= 64.04%

Therefore, The Recomputed debt to assets ratio after adjusting for this is 64%