Dearborn Supplies has total sales of
$ 207
million, assets of
$ 108
million, a return on equity of
35
percent, and a net profit margin of
7.9
percent. What is the firm's debt ratio?
The company's debt ratio is
nothing%.
(Round to one decimal place.)
Profit margin=Net income/Sales
Net income=(207*7.9%)=$16.353 million
ROE=Net income/equity
equity=16.353/0.35=$46.7228571 million
Total assets=debt+equity
debt=(108-46.7228571)=$61.2771429million
Hence debt ratio=debt/Total assets
=61.2771429/108
=56.7%(Approx).
Dearborn Supplies has total sales of $ 207 million, assets of $ 108 million, a return...
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