The asset turnover when the profit margin is 7 % and return on assets is 25.20 % . Introduction: Asset turnover: It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

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Answer 1

Question

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

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Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.)

Using the DuPont method, evaluate the effects of the following relationships for the Butters Corporation. A.Butters Corporation has a profit margin of 5.5 percent and its return on assets (investment) is 8.75 percent. What is its assets turnover? Round your answer to 2 decimal places. ______ times B.If the Butters Corporation has a debt-to-total-assets ratio of 65.00 percent, what would the firm’s return on equity be? Note: Input your answer as a percent rounded to 2 decimal places. C.What would happen to return on equity if the debt-to-total-assets ratio decreased to 60.00 percent? Input your answer as a percent rounded to 2 decimal places.

1. The Wilson Corporation has the following relationships:Sales/Total assets 2.0Return on assets (ROA) 4.0%Return on equity (ROE) 6.0%What is Wilson’s profit margin and debt ratio?

Answer 2

Question

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

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Answer 3

Question

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Answer 6

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

Answer 7

Chapter 3, Problem 15P

a.

Summary Introduction

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

Answer 8

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

Answer 9

b.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-asset ratio is 50%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity. It is a ratio that helps the company measure its profitability with respect to its equity.

Answer 10

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Answer 11

c.

Summary Introduction

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Answer 12

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Answer 14

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Answer 15

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The asset turnover when the profit margin is 7 % and return on assets is 25.20 % . Introduction: Asset turnover: It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

Solution Summary: The author explains how to calculate the return on equity of Butters Corporation when the debt-to-asset ratio is decreased to 35%.

Videos

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Want to see the full answer?

Chapter 3 Solutions

The asset turnover when the profit margin is 7 % and return on assets is 25.20 % . Introduction: Asset turnover: It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

Solution Summary: The author explains how to calculate the return on equity of Butters Corporation when the debt-to-asset ratio is decreased to 35%.

Videos

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% . Introduction: Asset turnover: It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%. Introduction: Return on equity: It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.

Want to see the full answer?

Chapter 3 Solutions

To calculate: The asset turnover when the profit margin is 7% and return on assets is 25.20% .

Introduction:

Asset turnover:

It is a ratio that computes that competence a firm has to use its assets for the generation of income or sales revenue for the firm.

To determine: The return on equity of Butters Corporation when the debt-to-total-assets ratio is decreased to 35%.

Introduction:

Return on equity:

It shows the financial performance of a firm by dividing the net income with shareholdersâ€™ equity.