"Suppose a firm's total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10% and its debt increases from 40% of total assets to 60%. Under these conditions, the ROE will increase. Explain why this is true"
So I know that ROE= TAT*EM*PM
ROE (original)= 1.0*.09*?
ROE (new)= .9*.1*?
I thought the EM should be 40% and 60% respecitively, but when I do that, the ROE decreases...so how do I find how much debt is if its 40% of total assets, but I don't know the amount of assets?