Answer:
a. $1,764,000.00
b. 12.08%
c. 19.17%
Explanation:
a. What is the company's net income?
Profit margin = Net income ÷ Sales
Therefore, we have:
9% = Net income ÷ $19,600,000
Net income = $19,600,000 × 9% = $1,764,000.00
Therefore, the net income of Aquilera, Inc. is $1,764,000.00
b. What is the company's Return on Assets (ROA)?
ROA = Net income ÷ Total Assets
ROA = $1,764,000 ÷ $14,600,000 = 0.120821917808219 = 12.08%
Therefore, the ROA of Aquilera, Inc. is 12.08%
c. What is the company's Return on Equity (ROE)?
Total Assets = Total Debt + Total Equity
Therefore,
Total Equity = Total Assets - Total Debt
Total Equity = $14,600,000 - $5,400,000 = $9,200,000
ROE = Net income ÷ Total Equity
ROE = $1,764,000 ÷ $9,200,000 = 0.191739130434783 = 19.17%
Therefore, the ROE of Aquilera, Inc. is 19.17%
