Business: During the latest year. xyz corporation has total sales of $400,000. net income of 1, and its year end total sses were s 500 000. the firm s total debt to total assets ratio was 30%, what is firm s profit margin? (enter your answers as a decimal rounded to 4 decimal places, not a percentage. for example, enter 0. 0843 instead of 8.43 your answer d view hint for question 23 question 24 (1 point) if a company s roa is 9% and its total long-term debt to total assets ratio is 40%, what is its roe (return

During the latest year. xyz corporation has total

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11.01.2022

2.50%; 15%

Explanation:

Profit margin = (Net income ÷ sales) × 100

= ($10,000 ÷ $400,000) × 100

= 2.50%

Total long-term debt to total assets ratio = 40%

So,

= Total equity ÷ Total assets

= 60%

Equity multiplier = Total assets ÷ Total equity

= 1.66667

ROA = 9%

ROE (return on equity):

= (Profit margin × Total assets turnover) × Equity multiplier

= ROA × Equity multiplier

= 9% × 1.66667

= 15%

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