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

    May 24, 2013, 05:41 PM
    How do you figure out debt ration?
    Total sales 200 million
    Assets 100 million
    Return equity 30%
    Net profit margin 7.5%

    What is the formula to figure out debt ratio?
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
    		  
    #2

    May 25, 2013, 04:40 AM
    From Sales and Net Profit Margin you can derive Net Income.

    From Net Income and Return on Equity you can derive amount of Equity.

    From Equity and Assets you can determine Debt.

    From Debt and Equity comes your desired ratio.
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