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cl①ezto.mheducation.com/hm.tpx izaje AC × 5 thru Notes Rec. (10 polnts) 6 0 . 0 points You d that they have not adjusted for estimated bad debt expenses of $8,100. For each of the following ratios, calculate 2. The correct ratio 3 ROE 10
Expert Answer
Incorrect:
Debt ratio=Total liabilities/Total assets
=$209,000/$560,000
=37.32%
Correct:
ROA=Net income/Average Total assets
=($117,100-$8,100)/[($550,000+$560,000-$8,100)/2]
=19.78%
ROE=Net income/Average Equity
=($117,100-$8,100)/($340,000+$351,000-$8,100)
=31.92%
Debt ratio=Total liabilities/Total assets
=$209,000/($560,000-$8100)
=37.87%
