jcau99
Sep 12, 2007, 06:51 AM
How do you find the Return on Equity given the debt-total asset ratio of a company and it's return on total assets? For instance:
Company A:
debt-total asset ratio is 60%
return on total-assets is 20%
Company B:
debt-total asset ratio is 40%
return on total-assets is 30%
Which Company has a greater return on equity?
I could guess that Company B would have a greater return on equity because their ROA is higher with a lower ratio of debt/assets but I don't see any way to get a number based on only percentages.
Company A:
debt-total asset ratio is 60%
return on total-assets is 20%
Company B:
debt-total asset ratio is 40%
return on total-assets is 30%
Which Company has a greater return on equity?
I could guess that Company B would have a greater return on equity because their ROA is higher with a lower ratio of debt/assets but I don't see any way to get a number based on only percentages.