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8. Problem 4.11 Click here to read the eBook: Profitability Ratios RATIO CALCULATIONS Assume the following relationships for

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Answer #1

Profit margin = ROA / Sales/Total assets

Profit margin = 0.03 / 2.4

Profit margin = 0.0125 or 1.25%

Debt-to-capital ratio = ROA / ROE

Debt-to-capital ratio = 0.03 / 0.14

Debt-to-capital ratio = 0.2143 or 21.43%

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