Kansas Orthotics had $24,000,000 in sales last year. The companys net income was $400,000. Its total assets turnover was 6.0. The companys ROE was 15 percent. The company is financed entirely with debt and common equity. What is the companys debt ratio?

2 PROBLEM 7 3 Kansas Orthotics had $24,000,000 in sales last year. The company's net income was $400,000. Its total assets turnover was 6.0. The company's ROE was 15 percent. The company is financed 5 entirely with debt and common equity. What is the company's debt ratio? 7 ANSWER 8 Debt ratio Debt/Total assets 9 Total assets S TATO 6Sales/Total assets.) 11 ROE NVEquity 12 Equity = NI/ROE = S 13 14 Debt Total assets Equity $ 15 Debt ratio 16 17 18 19 20 21 / Spreadsheet solution: Sales Net income Total asset turnover Return on equity Total assets Equity Debt Debt ratio #DIV/0! #DIV/0! #DIV/0! 23 24 26 27 28 29 30 31 32 34 35 36 37 38 39 40 42 43 45 46 47 48 49 51 52 54