Answer:
The answer is 13.67%
Explanation:
Return on equity(ROE) is a measure of profitability.
The formula for ROE is
net income/equity.
Equity was not given. So we need to find it.
Total debt ratio = total debt/total asset
Total debt is $327,000
Total asset = y
0.52= $327,000/y
y = $327,000/0.52
Total asset = $628,846.
Equity = Total asset - total liability (total debt)
$628,846 - $327,000
=$301,846
Therefore, ROE = net income/equity
$41,250/$301,846
0.1367
Expressed as a percentage:
0.1367 x 100
13.67%
