Kelso's Has a Return on Equity of 16

question 44

Multiple Choice

Kelso's has a return on equity of 16.2 percent,a debt-equity ratio of 44 percent,a capital intensity ratio of 1.08,a current ratio of 1.25,and current assets of $138,000.What is the profit margin?

• A)12.15 percent
• B)9.72 percent
• C)7.48 percent
• D)15.19 percent
• E)13.69 percent

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Definitions:

Mortgage

A written instrument that gives a creditor (the mortgagee) an interest in, or lien on, the debtor’s (mortgagor’s) real property as security for a debt. If the debt is not paid, the property can be sold by the creditor and the proceeds used to pay the debt.

Creditor

An individual, institution, or entity that lends money or extends credit, expecting to be repaid.

Lien

A claim against specific property to satisfy a debt.

Mortgage Insurance

Insurance that compensates a lender for losses due to a borrower’s default on a mortgage loan.