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Carroll, inc., has a total debt ratio of .52, total debt of $327,000, and net income of $41,250. what is the company's return on equity? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,


e.g., 32.16.) return on equity %

Respuesta :

tutordamola

Answer:

The answer is 13.67%

Explanation:

Return on equity(ROE) is a measure of profitability.

The formula for ROE is

net income/equity.

Equity was not given. So we need to find it.

Total debt ratio = total debt/total asset

Total debt is $327,000

Total asset = y

0.52= $327,000/y

y = $327,000/0.52

Total asset = $628,846.

Equity = Total asset - total liability (total debt)

$628,846 - $327,000

=$301,846

Therefore, ROE = net income/equity

$41,250/$301,846

0.1367

Expressed as a percentage:

0.1367 x 100

13.67%

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