Martinez, Inc., has a total debt ratio of 0.49, total debt of $330,000, and net

Question

Martinez, Inc., has a total debt ratio of 0.49, total debt of $330,000, and net income of $42,000.

Required: What is the company’s total assets? (Do not round intermediate calculations.Round your answer to the nearest whole number (e.g., 32).)

Total assets $

What is the company’s total equity? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).)

Total equity $

What is the company’s return on equity? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Return on equity %

Explanation / Answer

Statement showing computations Particulars Amount Total Debt Ratio = Debt/Assets                      0.49 Total Debt         330,000.00 330,000/ Assets = .49 Assets = 330,000/.49         673,469.39 Equity = Assets - Debt = 673,469.39 - 330,000         343,469.39 Return on Equity =42,000 / 343,469.39 12.23%

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