Asked by Katelyn Goodridge on Jul 13, 2024
Verified
Stephen's Auto Body Shop (Oshawa) has a debt-equity ratio of.6, a total asset turnover of 1.43, and a profit margin of 5 %. The firm has a return on assets of _____ % and a return on equity of _____ %.
A) 7.15; 4.29
B) 7.15; 11.44
C) 8.58; 4.29
D) 8.58; 7.15
E) 11.44; 7.15
Debt-Equity Ratio
A financial ratio that represents the comparative deployment of shareholders' equity and debt in asset financing.
Total Asset Turnover
A financial metric indicating how efficiently a company uses its assets to generate sales revenue.
Profit Margin
A financial ratio that shows the percentage of revenue that surpasses the cost of goods sold, indicating the financial health and profitability of a business.
- Comprehend the significance and utilization of profitability metrics, including Return on Assets (ROA) and Return on Equity (ROE).
- Determine and compute leverage metrics including times interest earned, overall debt ratio, and debt-to-equity ratio.
Verified Answer
Learning Objectives
- Comprehend the significance and utilization of profitability metrics, including Return on Assets (ROA) and Return on Equity (ROE).
- Determine and compute leverage metrics including times interest earned, overall debt ratio, and debt-to-equity ratio.
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