What is their debt-equity ratio and debt ratio

Assignment Help Financial Management

Reference no: EM131870838

The Wilson Corp has the following relationships:

Sales/Total Assets= 2

ROA=4%

ROE=6%

A. What is their debt ratio? (answer should be 33%)

B. What is their debt-equity ratio? (answer should be .5)

Can you please show me the steps to get to these answers?

I know for debt ratio it relates to this:

DEBT(.5)

EQUITY(1)

= TA=1.5, so TDR= 33%

Where is the .5 for debt from? And how did we get 1 for equity?

Reference no: EM131870838

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