Debt ratio=Debt/total assets Hence debt=0.55total assets Hence total assets=(2.5/0.55)=$4.545million total assets=debt+equity Hence equity=(1-0.55)=0.45total assets =(0.45*$4.545million)=$2.045 million(Approx) ROE=Net income/total equity = ($250,000/2,045,454.545) =12.22%(Approx). Solution Debt ratio=Debt/total assets Hence debt=0.55total assets Hence total assets=(2.5/0.55)=$4.545million total assets=debt+equity Hence equity=(1-0.55)=0.45total assets =(0.45*$4.545million)=$2.045 million(Approx) ROE=Net income/total equity = ($250,000/2,045,454.545) =12.22%(Approx)..