SlideShare a Scribd company logo
1 of 1
Download to read offline
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).

More Related Content

More from neetuarya13

3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
neetuarya13
 
Which is a common trait among all land plantsVascular tissues tra.pdf
Which is a common trait among all land plantsVascular tissues tra.pdfWhich is a common trait among all land plantsVascular tissues tra.pdf
Which is a common trait among all land plantsVascular tissues tra.pdf
neetuarya13
 
What are the similarities and differences between simple linear regr.pdf
What are the similarities and differences between simple linear regr.pdfWhat are the similarities and differences between simple linear regr.pdf
What are the similarities and differences between simple linear regr.pdf
neetuarya13
 

More from neetuarya13 (20)

3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
3. A plant breeder crosses an inbred soybean cultivar with herbicide.pdf
 
A mirror faces a cliff located some distance away. Mounted on the cli.pdf
A mirror faces a cliff located some distance away. Mounted on the cli.pdfA mirror faces a cliff located some distance away. Mounted on the cli.pdf
A mirror faces a cliff located some distance away. Mounted on the cli.pdf
 
Why is it important to identify Classes early in the Unified Process.pdf
Why is it important to identify Classes early in the Unified Process.pdfWhy is it important to identify Classes early in the Unified Process.pdf
Why is it important to identify Classes early in the Unified Process.pdf
 
A male Drosophila melanogaster has the genotype Aa; Bb; Cc; XDY..pdf
A male Drosophila melanogaster has the genotype Aa; Bb; Cc; XDY..pdfA male Drosophila melanogaster has the genotype Aa; Bb; Cc; XDY..pdf
A male Drosophila melanogaster has the genotype Aa; Bb; Cc; XDY..pdf
 
Which of the following facilitated the endosymbiotic acquisition of .pdf
Which of the following facilitated the endosymbiotic acquisition of .pdfWhich of the following facilitated the endosymbiotic acquisition of .pdf
Which of the following facilitated the endosymbiotic acquisition of .pdf
 
Which of the following is true about replication    The lagging s.pdf
Which of the following is true about replication    The lagging s.pdfWhich of the following is true about replication    The lagging s.pdf
Which of the following is true about replication    The lagging s.pdf
 
Which is a common trait among all land plantsVascular tissues tra.pdf
Which is a common trait among all land plantsVascular tissues tra.pdfWhich is a common trait among all land plantsVascular tissues tra.pdf
Which is a common trait among all land plantsVascular tissues tra.pdf
 
Which of the following is an example of company whose business model .pdf
Which of the following is an example of company whose business model .pdfWhich of the following is an example of company whose business model .pdf
Which of the following is an example of company whose business model .pdf
 
what role(s) played by the Equatorial Segment Protein 1 (ESP1) durin.pdf
what role(s) played by the Equatorial Segment Protein 1 (ESP1) durin.pdfwhat role(s) played by the Equatorial Segment Protein 1 (ESP1) durin.pdf
what role(s) played by the Equatorial Segment Protein 1 (ESP1) durin.pdf
 
What are the similarities and differences between simple linear regr.pdf
What are the similarities and differences between simple linear regr.pdfWhat are the similarities and differences between simple linear regr.pdf
What are the similarities and differences between simple linear regr.pdf
 
What does it mean if a human female oocyte is no longer arrested in .pdf
What does it mean if a human female oocyte is no longer arrested in .pdfWhat does it mean if a human female oocyte is no longer arrested in .pdf
What does it mean if a human female oocyte is no longer arrested in .pdf
 
What is so important about the cells in the HeLo cell cultureWhat.pdf
What is so important about the cells in the HeLo cell cultureWhat.pdfWhat is so important about the cells in the HeLo cell cultureWhat.pdf
What is so important about the cells in the HeLo cell cultureWhat.pdf
 
What are the advantages and disadvantages to patients of increasing .pdf
What are the advantages and disadvantages to patients of increasing .pdfWhat are the advantages and disadvantages to patients of increasing .pdf
What are the advantages and disadvantages to patients of increasing .pdf
 
Use the Limit definition to compute f(a) and find the equation of .pdf
Use the Limit definition to compute f(a) and find the equation of .pdfUse the Limit definition to compute f(a) and find the equation of .pdf
Use the Limit definition to compute f(a) and find the equation of .pdf
 
under which condition would a cell membrane be most likely to be in .pdf
under which condition would a cell membrane be most likely to be in .pdfunder which condition would a cell membrane be most likely to be in .pdf
under which condition would a cell membrane be most likely to be in .pdf
 
Two numbers together add to 300. One number is twice the size of the.pdf
Two numbers together add to 300. One number is twice the size of the.pdfTwo numbers together add to 300. One number is twice the size of the.pdf
Two numbers together add to 300. One number is twice the size of the.pdf
 
The stockholders interest in a corporation is called O Liabilities.pdf
The stockholders interest in a corporation is called O Liabilities.pdfThe stockholders interest in a corporation is called O Liabilities.pdf
The stockholders interest in a corporation is called O Liabilities.pdf
 
Suggest topics to write a term paper for Software Engineeering subje.pdf
Suggest topics to write a term paper for Software Engineeering subje.pdfSuggest topics to write a term paper for Software Engineeering subje.pdf
Suggest topics to write a term paper for Software Engineeering subje.pdf
 
Standardize terminologies, i.e. Vocabularies, are used to represent c.pdf
Standardize terminologies, i.e. Vocabularies, are used to represent c.pdfStandardize terminologies, i.e. Vocabularies, are used to represent c.pdf
Standardize terminologies, i.e. Vocabularies, are used to represent c.pdf
 
15--The Securities and Exchange Commission’s (SEC’s) adoption of rul.pdf
15--The Securities and Exchange Commission’s (SEC’s) adoption of rul.pdf15--The Securities and Exchange Commission’s (SEC’s) adoption of rul.pdf
15--The Securities and Exchange Commission’s (SEC’s) adoption of rul.pdf
 

Recently uploaded

Seal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptxSeal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptx
negromaestrong
 

Recently uploaded (20)

How to Give a Domain for a Field in Odoo 17
How to Give a Domain for a Field in Odoo 17How to Give a Domain for a Field in Odoo 17
How to Give a Domain for a Field in Odoo 17
 
Sociology 101 Demonstration of Learning Exhibit
Sociology 101 Demonstration of Learning ExhibitSociology 101 Demonstration of Learning Exhibit
Sociology 101 Demonstration of Learning Exhibit
 
Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)
 
UGC NET Paper 1 Mathematical Reasoning & Aptitude.pdf
UGC NET Paper 1 Mathematical Reasoning & Aptitude.pdfUGC NET Paper 1 Mathematical Reasoning & Aptitude.pdf
UGC NET Paper 1 Mathematical Reasoning & Aptitude.pdf
 
Seal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptxSeal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptx
 
Kodo Millet PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
Kodo Millet  PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...Kodo Millet  PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
Kodo Millet PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
 
Understanding Accommodations and Modifications
Understanding  Accommodations and ModificationsUnderstanding  Accommodations and Modifications
Understanding Accommodations and Modifications
 
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptxBasic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
 
On National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan FellowsOn National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan Fellows
 
Dyslexia AI Workshop for Slideshare.pptx
Dyslexia AI Workshop for Slideshare.pptxDyslexia AI Workshop for Slideshare.pptx
Dyslexia AI Workshop for Slideshare.pptx
 
Unit-IV- Pharma. Marketing Channels.pptx
Unit-IV- Pharma. Marketing Channels.pptxUnit-IV- Pharma. Marketing Channels.pptx
Unit-IV- Pharma. Marketing Channels.pptx
 
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17  How to Extend Models Using Mixin ClassesMixin Classes in Odoo 17  How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
 
Magic bus Group work1and 2 (Team 3).pptx
Magic bus Group work1and 2 (Team 3).pptxMagic bus Group work1and 2 (Team 3).pptx
Magic bus Group work1and 2 (Team 3).pptx
 
Third Battle of Panipat detailed notes.pptx
Third Battle of Panipat detailed notes.pptxThird Battle of Panipat detailed notes.pptx
Third Battle of Panipat detailed notes.pptx
 
Introduction to Nonprofit Accounting: The Basics
Introduction to Nonprofit Accounting: The BasicsIntroduction to Nonprofit Accounting: The Basics
Introduction to Nonprofit Accounting: The Basics
 
How to Create and Manage Wizard in Odoo 17
How to Create and Manage Wizard in Odoo 17How to Create and Manage Wizard in Odoo 17
How to Create and Manage Wizard in Odoo 17
 
ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.
 
Spatium Project Simulation student brief
Spatium Project Simulation student briefSpatium Project Simulation student brief
Spatium Project Simulation student brief
 
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptxSKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
 
SOC 101 Demonstration of Learning Presentation
SOC 101 Demonstration of Learning PresentationSOC 101 Demonstration of Learning Presentation
SOC 101 Demonstration of Learning Presentation
 

Jiminy Cricket Removal has a profit margin of 10 percent, total asse.pdf

  • 1. 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).