Jiminy Cricket Removal has a profit margin of 10 percent, total asset turnover of 1.06, and ROE of 14.4 percent. What is this firm's debt-equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) Debt-equity ratio times

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