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20 May, 18:07

has sales of $15 million, total assets of $9 million, and total debt of $3.7 million. If the profit margin is 7 percent what is net income? What is ROE? What is ROA?

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  1. 20 May, 19:54
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    Net Income = $ 1.05 million; you can calculate the amount using the profit margin which will be the 7% from the sales.

    ROE = 19.8%, the formula is Net Income/Owners Equity. To obtain the amount for Owners Equity you can use the information provided using the Assets and the Total Debt, the difference will be the amount for Owners Equity $ 5.3million.

    ROA = 11.7%, the formula is Net Income/Assets.
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