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Ratio Problems 303 2015 A firm has the following ratios: ROE = 25% (return on equity)

Ratio Problems 303 2015 A firm has the following ratios: ROE = 25% (return on equity)

Ratio Problems 303 2015

  1. A firm has the following ratios: ROE = 25% (return on equity), ACP = 40 days (average collection period), PM = 5% (profit margin), CR = 2.4 (current ratio), ATO = 2.2 (asset turnover), and DSI = 92 days (days of sales in inventory). Find the firm’s debt-to-asset (D/A) ratio. 
  2. a) If the equity multiplier of a company is 3, what is its D/A ratio and its D/E ratio? b) If the D/A ratio of a company is 60%, what is its EM ratio and its D/E ratio? c) If the D/E ratio of a company is 1.5, what is its EM ratio and its D/A ratio?
Rosa Parks 08-Nov-2017

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