Profit Margin and Debt Ratio Assume you are given the following relationships fo

Question

Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.8 Return on assets (ROA) 2% Return on equity (ROE) 7% Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. ________ % Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. ________ % Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. ________ %

Explanation / Answer

Sales/total assets = 1.8 Total Assets = Sales/1.8 Net Income/total assets = 2.00% Total Assets = Net Income/0.02 Net Income/ SH Equity = 7.00% Net Income = SH Equity *0.07 Profit Margin = Net Income/Net Sales TotalAssets*2%/Total Assets*1.8 0.02Total Assets/1.8Total Assets 0.02/1.8 0.01 1.11 Liabilities to asset ratio = Total Liab/Total Assets (Total Assets-SH Equity)/Total Assets (Total Assets-SH Equity)/Total Assets Total Assets-Net Income/0.07)/Total Assets (Total Assets-0.02Total Assets)/Total Assets 0.08Total Assets/Total Assets 0.08

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.