In$-$Class Problem Solving #$4$

Chapter $10$

$1$ Profitability & Asset Utilization Ratios:

Cascadia Metals has $$1\mathrm{.}6$ million in assets and $$0\mathrm{.}7$ million in total debt. They report net income of $$0\mathrm{.}15$ million in $2022.$

a$.$ What is their ROA $($return on assets$)?$

b$.$ What is their ROE $($return on shareholders' equity$)?$

c$.$ If the firm has an asset turnover ratio of $3\mathrm{.}00$ times, what is their profit margin?

Solution:

ROA$=N\frac{l}{?}$ Total Assets

$NI=$

Total Assets $=$

ROA$=$

$)$

$NI=$

Shldr Equity $=$

ROE$=$