Answer:
This firm’s debt–equity ratio is 0.54 or 54%
Explanation:
Debt–equity ratio = Total Debt / Total Equity = 0.37 / 0.69 = 0.54
Profit Margin = Net Profit / Net sales
10% = Net Profit / Net sales
Consider Sales as $1
Net Profit = 0.1 x 1 = 0.1
Total Asset Turnover = Net Sales / Total Assets
1.06 = 1/ total Asset
Total Asset = 1.06 x 1 = 1.06
Return on capital = Net Profit / Net Capital
14.40% = 0.1 / Total Capital
Total Capital = 0.1 / 0.144 = 0.69
Total Assets = Capital + Liabilities
1.06 = 0.69 + Total Liabilities
Total Liabilities = 1.06 - 0.69 = 0.37
