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A firm has a debt to asset ratio of 75%, $264,000 in debt, and net income of $49,280. calculate return on equity

A firm has a debt to asset ratio of 75%, $264,000 in debt, and net income of $49,280. calculate return on equity
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A firm has a debt to asset ratio of 75%, $264,000 in debt, and net income of $49,280. calculate return on equity

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User Mark Sinkinson
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1 Answer

2 votes
Asset = 264,000 / 0.75 = $352,000
Shareholders equity = $352,000 - $264,000 = 88,000

Return on equity = 49,280 / 88,000 x 100% = 56%
answered
User Haziz
by
8.5k points
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