Answer:
Debt / Equity = 0.72649 : 1 or 72.649%
Explanation:
The ROE or return on equity can be calculated using the Du Pont equation. It breaks the ROE into three components. The formula for ROE under Du Pont is,
ROE = Net Income / Sales * Sales / Total Assets * Total Assets / Shareholder's equity
or
ROE = Net Income / Total equity
Assuming that sales is $100.
Net Income = 100 * 0.051 = 5.1
Total Assets = 100 / 1.84
Total Assets = 54.35
0.162 = 5.1 / Total equity
Total Equity = 5.1 / 0.162
Total Equity = 31.48
We know that Assets = Debt + Equity
So,
54.35 = Debt + 31.48
Debt = 54.35 - 31.48
Debt = 22.87
Debt / Equity = 22.87 / 31.48
Debt / Equity = 0.72649 : 1 or 72.649%
