Ask Question
30 September, 03:00

Carroll, inc., has a total debt ratio of. 52, total debt of $327,000, and net income of $41,250. what is the company's return on equity? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,

e. g., 32.16.) return on equity %

+1
Answers (1)
  1. 30 September, 03:22
    0
    The answer is 13.67%

    Explanation:

    Return on equity (ROE) is a measure of profitability.

    The formula for ROE is

    net income/equity.

    Equity was not given. So we need to find it.

    Total debt ratio = total debt/total asset

    Total debt is $327,000

    Total asset = y

    0.52 = $327,000/y

    y = $327,000/0.52

    Total asset = $628,846.

    Equity = Total asset - total liability (total debt)

    $628,846 - $327,000

    =$301,846

    Therefore, ROE = net income/equity

    $41,250/$301,846

    0.1367

    Expressed as a percentage:

    0.1367 x 100

    13.67%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Carroll, inc., has a total debt ratio of. 52, total debt of $327,000, and net income of $41,250. what is the company's return on equity? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers