Dearborn Supplies has total sales of $ 207 million, assets of $ 108 million, a return...

Question

Question

Dearborn Supplies has total sales of $ 207 million, assets of $ 108 million, a return...

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.)

business finance

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Answer 1

Answer #1

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).

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Answer 2

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Dearborn Supplies has total sales of $ 207 million, assets of $ 108 million, a return...

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Dearborn Supplies has total sales of $ 207 ​million, assets of $ 108 ​million, a return...

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