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    shwetypie2000's Avatar
    shwetypie2000 Posts: 1, Reputation: 1
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    #1

    Jan 28, 2010, 06:57 AM
    Calculate Net Fixed Asset with profit margin, sales, ROE
    Calculate Net Fixed assets- given, longterm-debt to total assets ratio is 0.70, current ratio of 1.20, current liabilities are $850, sales are $4,310, profit margin is 9.5% and ROE is 21.5%.
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #2

    Jan 28, 2010, 10:41 PM

    It would have helped if you had posted your solution to the problem to be able to guide you, However, as a guidance follow these steps:
    1. Calculate net income = Sales x profit margin
    2. Divide net income by ROE% to get equity
    3. Since equity is 0.30 of the total assets, find total assets by dividing equity with that ratio
    4. Calculate current assets by using current liabilities x current ratio
    5. Deduct current assets from total assets to get net fixed assets
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