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Revenue 500000
Gross profit 120000
Operating profit 50,000
Loan 60000
Asset turnover 4 times
Calculate gearing ratio?
I think there is no way to calculate equity but in answers the equity is given to be e 125000 and I don’t think there is any formula to calculate equity by dividing revenue and asset turnover ratio.
Thanks sirThe asset turnover is 4, and therefore the total net assets = 500,000/4 = 125,000.
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