Keystone Resources has a net profit margin of 8 percent and earnings after taxes of

$2 million. Its current balance sheet is as follows: k-63

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Current assets Fixed assets Total assets $6,000,000 10,000,000 $16,000,000 Current liabilities $3,500,000 Long-term debt 5,500,000 Common stock 2,000,000 Retained earnings 5,000,000 Total liabilities and stockholders' equity $16,000,000 a. Calculate Keystone's return on stockholders' equity. b. Industry average ratios are Net profit margin Total asset turnover Equity multiplier 10% 2.0 times 1.5 times