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    blondies01's Avatar
    blondies01 Posts: 2, Reputation: 1
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    #1

    Jan 12, 2010, 02:10 PM
    Managerial accounting homework help
    Need help with calculating profitability ratios: if company has sales of 24 million, total assets of 18million and total debt of 7million, if profit margin is 8%, then what is net income, ROA and ROE? I know answers are 1.92 million; 10.67% and 17.45% but I do not know how to get these answers... Thanks!
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Jan 12, 2010, 03:02 PM
    Profit margin = . Since you're given two of those three pieces of the puzzle, you can easily solve for the third (Net income).

    With that in hand, then...

    ROA = ; and...

    ROE =

    I think you can run with the ball from here.
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