Jiminy Cricket Removal has a profit margin of 10 percent, total asset turnover of 1.14, and ROE of 14.32 percent. What is this firm’s debt–equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Debt–equity ratio ______ times Solution ROE=Profit margin*Total asset turnover*leverage 0.1432=0.1*1.14*leverage leverage=0.1432/(0.1*1.14) =1.256140351 leverage=Total assets/Equity Hence total assets =1.256140351equity Total assets=debt+equity 1.256140351equity=debt+equity Hence debt =(1.256140351-1)equity =0.256140351equity Hence debt-equity ratio=Debt/Equity =0.26 times(Approx)..