Answer:
The answer is 9.18 percent.
Explanation:
Return on equity = Net income(profit) / Total equity.
We need to find net profit and equity.
1. To find net income:
Profit margin = profit/sales
So profit = 0.05 x $3,900
= $195
2. To find asset:
Total debt ratio = total debt(liabilities)/ assets
Total debt = 0.41 x $3,600
Total debt(liabilities) = $1,476
Equity = Assets - liabilities
$3,600 - $1,476
= $2,124.
Therefore, return on equity is:
$195 /$2,124
0.0918
Expressed as a percentage
9.18 percent.
