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Cairns Travel, Inc. has a total asset turnover of 4.5 and a net profit margin of 4.50%. The firm has a return on equity of

Cairns Travel, Inc. has a total asset turnover of 4.5 and a net profit margin of 4.50%. The firm has a return on equity of 50.00%.

a) Calculate the company’s debt ratio.

b) Briefly explain how the company’s debt ratio will impact on equity investors.

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a To calculate Cairns Travel Incs debt ratio we need to use the formula Debt Ratio Total Debt Total Assets However we dont have the total debt informa... blur-text-image

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