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Net profit margin and debt ratio

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Assume you are given the following relationships for Zumwalt Corporation:

Sales/total assets 1.5x
Return on assets (ROA) 3.0%
Return on equity (ROE) 5.0%

Calculate Zumwalt's net profit margin and debt ratio.

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Solution Summary

The solution explains how to calculate the net profit margin and debt ratio given the return on assets and return on equity.

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1. Net Profit Margin
ROA = Net Income/Assets = Net Income/Sales X Sales/Assets
ROA = 3%
Net ...

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