QUESTION 21 Trico Windshield Wipers Corporation has a 24% return on equity. The debt ratio is...

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business finance

Answer 1

Answer #1

Ans) 10.40 Total Asset Turnover Ratio = 1.5 times Total Asset Turnover Ratio = sales÷total assets . Total assets = sales ÷ 1.5 -(1) Given Debt Ratio = 35% . Equity Ratio = 1 - Debt ratio =1-35%=65%. Equity Ratio = Equity ÷ total assets. Equity = 0.65 × total assets - (2) ROE = 24%. ROE = Profits after tax ÷ equity. Profits after tax = 0.24 × equity. = 0.24 × 0.65 × total assets ( from eq.2 ) . = 0.24 × 0.65 × sales /1.5 (from eq 1) . =10.40 × sales . Profit after tax = 10.40 × sales . Profit margin = paofit after tax ÷ sales. =10.40

Answer 2

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