Question

10 Surf's Up, a manufacturer of surfing supplies and training equipment, has the following selected data ($ in millions): points Surf's Up Selected balance sheet data 2021 Total assets $727 Total liabilities 628 Total stockholders' equity 9 9 2020 $718 530 188 ebook Surf's Up Selected income statement data 2021 Sales revenue $795 Interest expense 15 Tax expense 44 Net income References Based on these amounts, calculate the following ratios for 2021 (Do not round intermediate calculations. Round all final answers to 1 decimal place. Enter your answer in millions (i.e. 5,500,000 should be entered as 5.5)) Debt to Equity Ratio Return on Assets Ratio

Answer 1

Debt to equity ratio= total liabilities / stock holders equity

Debt to equity ratio = 628/99= 6.34 or 6.3 (rounded up)

Return on assets = net income / average assets

Average assets =( beginning of the period + end of the period)/2

Average assets = (727+718)/2= 722.5

Return on assets = 66/722.5= 0.09135 or 9.1% (rounded up)