Profitability and Asset Management RatiosYou are thinking of investing in Nikki T's, Inc. You have only the following information on the firm atyear-end 2015: net income is $250,000, total debt is $2.5 million, and debt ratio is 55 percent. What isNikki T's ROE for 2015?

Calculation of ROE:The ROE is 12.22%.Excel Spreadsheet:

Answered: Profitability and Asset Management…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Profitability and Asset Management Ratios You are thinking of investing in Nikki T's, Inc. You have only the following information on the firm at year-end 2015: net income is $250,000, total debt is $2.5 million, and debt ratio is 55 percent. What is Nikki T's ROE for 2015?