Question 16 (5 points)

If ROA (return on assets) = 18% and if ROE (return on equity) = 35%, what is the firm's debt ratio (i.e., Debt/Total assets). Assume, as always, that the balance sheet identity equation holds.

Record your answer as a percent rounded to one decimal place, but do not include the percent sign in your answer. For example, record 0.3428543 = 34.28543% as 34.3.

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Question 17 (5 points)

If ROA (return on assets) = 13% and if ROE (return on equity) = 36%, what is the firm's equity multiplier (i.e., Total assets/Equity).

Round your answer to two decimal places. For example, record 1.31854 as 1.32.

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Question 18 (5 points)

Given the following information for the Duke Tire Company, find the firm's debt ratio (i.e., total liabilities / total assets):

• ROE (N/E) = 0.29 (expressed as a decimal)
• Total asset turnover ratio (S/A) = 3.9
• Net profit margin (N/S) = 0.09 (expressed as a decimal)

Record your answer as a percent rounded to one decimal place, but do not include a percent sign in your answer. For example, record .347924 = 34.7924% as 34.8.

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Question 19 (5 points)

Given the following information for the Duke Tire Company, find ROA (Return on Assets):

• Debt ratio (D/A) = 0.33 (expressed as a decimal)
• Total asset turnover ratio (S/A) = 1.73
• Sales (S) = $10,000
• Net profit margin = 0.10 (expressed as a decimal)

Record your answer as a percent rounded to one decimal place, but do not include a percent sign in your answer. For example, record .347924 = 34.7924% as 34.8.

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Question 20 (5 points)

If a firm has a debt ratio (i.e., D/A) of 23%, what is the firm's debt to equity (i.e., D/E) ratio?

Record your answer as a ratio rounded to 2 decimal places. For example, record D/E = 100/180 = 0.56 or D/E = 300/125 = 2.40.

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