current assets 40% total debt 40% net income 16% total assets $2000 sales $1500 total asset turnover ratio 0.75 i get that ROE = net profit margin (16%) * asset turnover (0.75) * leverage (1.67) but don’t know how to calculate leverage

Debt = 40%. Equity is 60%. Let 100% represent assets. 100%/60% = 1.67

here you go… Assets = 2000… total debt ratio = .4 liabilities = assest * total debt ratio = 2000 * .4 Equity = assets - liabilites = (2000-(.4*2000)) Leverage = 2000/ 1200 = 1.67.

Assets = Liabilities + Equity Common Size Balance Sheet (using total assets as your denominator) debt = 800 2000=800+E E=1200 Leverage Ratio => A/E=2000/1200 = 1.6667

ROE = 20% debt = .4 of A eq = .6 of 2000 = 1200 levg = A/E = 2000/1200 i got 20% please confirm

yes 16% 0f 1500= 240 .60 of total assets 2000= 1200 240/1200=20%