E connect rystal Sellers BADM 363 Business Finance: Fall 2017 (ALL FINANCE instr
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E connect rystal Sellers BADM 363 Business Finance: Fall 2017 (ALL FINANCE instructions help haptor 3 Homework Question 14 (of 16) save & Exit!! Submit Time remalining 0:2B-41 10.00 points Problem 3-33 Return on Assets [LO 21 A fire has destroyed a large percentage of the financial ecords of the Excandesco Company You have the task of plecing together information in order to release a tnancial report You have found the return on equiy to be 15.7 percent. Sales were $1,770,000, the total debt ratio was.33, and total debt was $655,000 What is the return on assets (ROA)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return on assets References eBook & Resources Difficulty: 2 Intermediate Section: 3.2 Ratio Analysis Worksheet Problem 3-33 Return on Assets [LO Leaning Objective: 03-02 Compute and, more 21 important, interpret some common ratios 1/9/20172Explanation / Answer
Total debt ratio =Total debt /Total asset
.33 = 655000/ Total asset
Total asset = 655000/.33
= 1,984,848.48
equity = Total asset -Total debt
= 1,984,848.48-655,000
=$ 1,329,848.48
Return on equity =Net income /equity
.157= Net income / 1329848.48
Net income = 1329848.48*.157 = $ 208786.21
Return on asset =nEt income/asset
= 208786.21/1,984,848.48
= .1052 or 10.52%
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