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Isolation Company has debt-equity ratio of 0.7. Return on Assets is 9% and total equity is...
Isolation Company has debt-equity ratio of 0.7. Return on Assets is 9% and total equity is 511,312. What is the Net Income
Solutions
Expert Solution
Required:
- Debt equity ratio = Total liabilities / Total equity
0.7 = Total liabilities / 511,312
Total liabilities = 511,312 * 0.7
Total liabilities = 357,918
- Total assets = Liabilities + Equity
= $357,918 + 511,312
= 869,230
- Return on assets = Net income / Total assets
0.09 = Net income / 869,230
Net income = 0.09 * 869,230
Net income = 78,231.
Thus, net income = 78,231.
jeff jeffy answered 2 years agoRelated Solutions
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