Y3K, Inc., has sales of $7,495, total assets of $3,535, and a debt-equity ratio
ID: 2617401 • Letter: Y
Question
Y3K, Inc., has sales of $7,495, total assets of $3,535, and a debt-equity ratio of 36. Assume the return on equity is 17 percent. What is the company's equity multiplier? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Equity multiplier What is the company's total asset turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e,g, 32.16) Total asset turnover What is the company's profit margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin What is the company's net income? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net income times timesExplanation / Answer
Debt-equity ratio=Debt/equity
Hence debt=0.36equity
Total assets=debt+equity
3535=1.36equity
Hence equity=(3535/1.36)=$2599.264706
1.Equity multiplier=Total assets/Equity
=(3535/2599.264706)=1.36
2.Total asset turnover=Sales/Total assets
=(7495/3535)=2.12(Approx)
4.ROE=Net income/Equity
Net income=(0.17*$2599.264706)
=$441.88(Approx)
3.Profit margin=Net income/Sales
=(441.875/7495)
=5.90%(Approx).
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