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redky270
Jan 25, 2009, 11:38 AM
I'm really struggling with the problem below and was wondering if some one can assist? Any help/info offered is greatly appreciated!

Millers Metalworks, Inc. has a total asset turnover of 2.5 and a net profit margin of 3.5%. The total debt ratio for the firm is 50%. Calculate Miller's return on equity.

a) 19.5%
b) 23.5%
c) 17.5%
d) 21.5%

Here is what I've come up with so far.

ROE = net income/stockholders equity
I don't see any of that info given in the problem.

Trying to solve backwards, I detailed what is given in the problem thinking maybe that would help.

Total asset turn-ver = 2.5 (calculated by sales/total assets)
Net profit margin = 3.5% (calculated by net income/sales)
Total debt ration = 50% (calcuated by total liabilities/total assets)

Please help!