Equity multiplier = 24
Equity ratio = 1/3.0 = 0.33
Debt ratio + Equity ratio = 1
***THIS EQUATION IS THE KEY TO THE ANSWER***
By manipulating this formula you can find
Debt ratio = 1 - Equity ration
1 - 0.33 = 0.67 or 67%
Debt ratio = 67%
To calculate common equity in a financial statement, subtract total liabilities from total assets. This will give you the common equity, which represents the portion of a company's assets that belong to its common shareholders.
Common shareholders have the lowest claim on the assets of assets of a firm. They have only a residual claim on the assets and are far below the preferred stock classification.
Expansion
Monetary Value
A common size balance sheet is a type of standardized financial statement that completely lists all of a firms specific assets, liabilities, and equity claims as a percentage of a firms total assets.
ROE= profit margin × total assets turnover × equity multiplier ROE= ( Net income / sales ) × ( sales / total assets ) × ( total assets / common equity ) ROE= 3% × ( 100/50)×2 ROE = 3% × 4 = 12 %
The least common multiplier of 8 10 and 15 is 90.
2
2
2
12
156
54
390
1260
ROE= 8%
45