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Lee Sun's has sales of $3,300, total assets of $3,000, and a profit margin of 6 percent. The firm has a total debt ratio of 42 percent. What is the return on equity

Sagot :

The return on equity  is 11.37%.

What does an equity means?

  • The value that would be restored to a company's shareholders if all of its assets were sold and all of its obligations were settled is known as equity.
  • We can also think of equity as the amount of ownership that remains in a company or asset after all debts related to that asset have been paid off.

Net income = $3,300 x 0.06 = $198

Total debt ratio = 0.42 = ($3,000 - total equity)/$3,000

Total equity = $1740

Return on equity = $198/$1740

                              = 0.1137 or 11.37%

Learn more about equity brainly.com/question/2254380

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