PROBLEM 3-8 PROFIT MARGIN AND DEBT RATIO (CENGAGE)

Problem 3-8
Profit Margin and Debt Ratio

Assume you are given the following relationships for the Haslam Corporation:

Sales/total assets

1.4

Return on assets (ROA)

3%

Return on equity (ROE)

8%

1. Calculate Haslam’s profit margin. Do not round intermediate calculations. Round your answer to two decimal places.

2. Calculate Haslam’s liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.

3. Suppose half of Haslam’s liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.