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9 September, 04:15

Wiggle Pools has total equity of $358,200 and net income of $47,500. The debt-equity ratio is. 68 and the total asset turnover is 1.2. What is the profit margin?

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  1. 9 September, 04:39
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    It is 6.58%

    Explanation:

    Debt-Equity Ratio = Debt/Equity

    0.68 = Debt/358,200

    Debt = 0.68 x 358,200

    Debt = $243,576

    Total Asset Turnover = Revenue / Total Asset

    Total Assets = Debt + Equity = $243,576 + $358,200=$601,776

    1.2 = Revenue/601,776

    Revenue = 1.2 x 601,776

    =$722,131.20

    Profit Margin = Net income / Revenue x 100%

    = $47,500/$722,131.20 x100%

    = 6.58%
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