Assume you are given the following relationships for the Haslam Corporation: Sales/total assets - 1.9 Return on assets (ROA) - 4% Return on equity (ROE) - 6%Calculate Haslam's profit margin and liabilities-to-assets ratio. Suppose half its liabilities are in the form of debt. Calculate the debt-to-assets ratio.

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kharyurde kharyurde · Answer 1 · 2020-01-23T23:40:33+01:00

Answer:

Profit margin = 2.11%

Haslam's liabilities-to-assets ratio = 33.33%

Debt-to-assets ratio = 16.50%

Explanation:

Calculate Haslam's profit margin. /total assets)

Profit margin = 4%/1.9

Profit margin = 2.11%

Calculate Haslam's liabilities-to-assets ratio.

Haslam's liabilities-to-assets ratio = 1- ROA/ROE

Haslam's liabilities-to-assets ratio = 1- 4/6

Haslam's liabilities-to-assets ratio = 33.33%

Suppose half of Haslam's liabilities are in the form of debt.

Debt-to-assets ratio = Haslam's liabilities-to-assets ratio = 0.33

Debt-to-assets ratio = 50%*0.33

Debt-to-assets ratio = 16.50%

nikitavidya0 nikitavidya0 · Answer 2 · 2022-03-23T08:07:37+01:00

Haslam's profit margin is 2.11% and the liabilities-to-assets ratio is 33.33%. Finally, his Debt-to-assets ratio is 16.50%

[tex]Profit margin = \frac{ROA}{total assets} \\=\frac{0.04}{1.9} * 100\\=2.11[/tex]

[tex]1- \frac{ROA}{ROE} \\1-\frac{0.04}{6} \\=33.33[/tex]

[tex]0.5*0.33\\=0.1665*100\\=16.5[/tex]

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