Answered: A firm has a profit margin of 3% and an…

A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million ,and its total assets of $60 million. What is the ROE?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 6P

See similar textbooks

Related questions

Q: Bryley, Inc. earned a net profit margin of 5.5 percent last year and had an equity multiplier of…

A: The return on equity can be calculated as per the Dupont equation

Q: A firm has total assets of $1 million and a debt ratio of 30%. Currently, it has sales of $2.5…

A: Working note:

Q: Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's…

A: Total dividends= $35,000 Net income= $200,000 Firm's payout ratio=?

Q: The firm has $750,000 of debt and $250,000 of equity. What is the company’s leverage ratio?

A: The leverage ratio is used to check whether a company has the means to meet its financial…

Q: The Intelinet Corporation and Comp Inc. have assets of $100,000 each and a return on common equity…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: National Co. had P24,000,000 in sales last year. The company’s net income was P500,000, its total…

A: Financial ratios: Financial ratios are performance measurement methods used by a company to Measure…

Q: Y3K, Inc., has sales of $6,319, total assets of $2,935, and a debt-equity ratio of 1.30. If its…

A: Given the following information: Sales: $6,319 Total assets: $2,935 Debt equity ratio: 1.30 Return…

Q: Bridgette Inc. has forecasted that its net income will be P400,000. The company has debt ratio of…

A: Given Information : Net Income = P400,000 Debt ratio = 30%Project Investment = P500,000 Number of…

Q: Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 1.7. Its sales are $90…

A: Return on equity is one of the ratios that tell about the financial position of the company. It can…

Q: Dearborn Supplies has total sales of $210 million, assets of $108 million, a return on equity of…

A: Concept: The debt ratio is defined as the financial ratio that includes the measure of company’s…

Q: net

A: Introduction: The term net income can be defined as the excess of revenues over the expenses of the…

Q: A firm has net income of RM320,000 on sales of RM3,200,000. It’s assets total RM2,000,000, the…

A: Sustainable Growth Rate refers to Growth rate which can be maintained without additional financing…

Q: Triangular Chemicals has total assets of $95 million, a return on equity of 44%, a net profit margin…

A: Net profit margin is the net income generated by the sales revenue of the firm for a specified…

Q: firm has net income of $2.3 million.the firms capital structure consists of equity of $15 million…

A: Sustainable Growth Rate(SGR) is the maximum growth rate that can be sustained by the company without…

Q: Blue Co. has P15,000,000 sales with a 25% return on equity. Total assets turnover is 2´ and the firm…

A: Total assets turnover ratio= Sales / Total assets Total assets = Sales / Total assets turnover…

Q: Face Mask Company has a Total Sales of P100,000,000. Its total assets is 50,000,000 and a profit…

A: The mathematical equation:

Q: General Electric has a ROA of 11%, a 3.5% profit margin, and a ROE of 14.5%. What is its total…

A: Given: ROA = 11% Profit margin = 3.5% ROE = 14.5%

Q: The Ashwood Company has a long-term debt ratio of .45 and a current ratio of 1.25. Current…

A: Long term debt ratio = long term debt/(long term debt+equity) = 0.45 Current ratio = current…

Q: "s Hardwoods has a dividend payout ratio of 45 percent, a return on assets of 9.4 percent, anc quity…

A: Growth rate can be calculated from the return on equity and retention ratio of the company that is…

Q: A firm wishes to maintain a growth rate of 11 percent and a dividend payout ratio of 64 percent. The…

A: Calculation of debt equity ratio: Answer: Debt-equity ratio of firm is 2.40

Q: Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are…

A: The relationship between net income and total equity of the company states by return on equity…

Q: Lamar , Inc. has sales of $8500, total assets of $2500, and a debt to equity ratio of 0.8, if its…

A: Net income refers to the income or amount which is earned by the enterprise by rendering services or…

Q: A firm has a tax burden ratio of .75, a leverage ratio of 1.25, an interest burden of .6, and a…

A: Formula:

Q: A firm has Capital of GHS 10,00,000; Sales of GHS 5,00,000; Gross Profit of GHS 2,00,000 and…

A: Net Profit Ratio(NPR) is used determine profitability of entity. It shows proportion of turnover of…

Q: Dearborn Supplies has total sales of $206 million, assets of $94 million, a return on equity of…

A: Net income = Profit margin * Sales = 0.078 * $206 million = $16.068 million Equity = Net income /…

Q: Dearborn Supplies has total sales of $195 million, assets of $100 million, a return on equity of…

A: Return on equity = Net Income / Shareholder's equity Net profit margin = Net Income / Sales 7.4% =…

Q: The firm has a net income of $2.3 million. The firm's capital structure consists of Equity of $15…

A: Given information: Net income is $2.3 million Equity is $15 million, Debt is $10 million Company…

Q: NEKO Inc. has forecasted that its net income will be P400,000. The company has debt ratio of 30%.…

A: Net income (NI) = P400,000 Debt ratio = 30% Equity ratio (ER) = 100%-30% = 70% Investment…

Q: Choose the correct letter of answer: In the current year, Company A had P15 Million in sales, while…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: An all -equity firm reports a net profit margin of 12% on sales of $6 million. If the tax rate is…

Q: Green Fire, Inc., has sales of $60 million, total assets of $42 million, and total debt of $18…

A: The return on assets is reflective of profitability ratio which will help in finding out the rate of…

Q: A company has sales of $200 million, NOPAT of $12 million, net income of $8 million, net operating…

A: The provided information are: Sales = $200 million, NOPAT = $12 million, Net income = $8 million,…

Q: Suppose the growth rate of the firm's profit is 7 percent, the interest rate is 9 percent, and the…

A: In the given question we need to compute the value of the firm.

Q: A company has sales of $200 million, NOPAT of $12 million, netincome of $8 million, net operating…

A: Given information: Sales amounted to $200 million, NOPAT of $12 million, Net income of $8 million,…

Q: Lawn Care, Incorporated, has sales of $367,400, costs of $183,600, depreciation of $48,600, interest…

A: Return on equity (ROE) is calculated as net income divided by equity

Q: If Turnpoint Inc. has net income of $400,000, assets of $5,000,000, sales of $2,000,000, and debt of…

A: Information Provided: Net Income = $400,000 Assets = $5,000,000 Sales = $2,000,000 Debt = $2,000,000

Q: Oregon Office Supply had 24,000,000 in sales last year. The company’s net income was 400,000, its…

A: SALE 24,000,000 NET INCOME 400,000 TOTAL ASSETS TURNOVER 6.0 ROE 15% DEBT RATIO ?

Q: 16, the Allen corporation had sales of $63 million, total assets of $44 million, and total…

A: Operating return on assets = Operating profit / sales * 100 Return on equity = Net profit / Equity *…

Q: Ebersoll Mining has $6 million in sales, its ROE is 12%, and its total assets turnover is 3.2x. The…

A: Financial ratios are the quantitative measures used by analysts to determine the financial…

Q: The firm X has sales of $420,000, a tax rate of 32%, the payout ratio of 35%, and a net profit…

A: The given data are - Sales =$420,000 Net profit margin =6% So, Net Profit margin = Net profit/Sales…

Q: A firm has $100 million in total net operating capital. Its return oninvested capital is 14%, and…

A: Economic value added is the measurement of financial performance by deducting its cost of capital…

Question

A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million ,and its total assets of $60 million. What is the ROE?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Calculate the asset turnover ratio as follows:

VIEW

Step 2: Calculate the return on equity (ROE) as follows:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

My book gives the formula "Total assets turnover ratio = Sales divided by total assets" But here, the answer uses the opposite. Why?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are $100 million, and it has total assets of $50 million. What is its ROE?
A firm has a profit margin of 7% and an equity multiplier of 1.3. Its sales are $130 million, and it has total assets of $78 million. What is its ROE? Do not round intermediate calculations. Round your answer to two
DTO, Inc., has sales of $32 million, total assets of $25 million, and total debt of $7 million. a. If the profit margin is 6 percent, what is the net income? b. What is the ROA? c. What is the ROE?
A firm has sales of $800, total assets of $500, and a debt/equity ratio of 1.5. If its return on equity is 18%, what is its net income?
A firm has a profit margin of 7% and an equity multiplier of 1.9. Its sales are $230 million, and it has total assets of $92 million. What is its ROE? Do not round intermediate calculations. Round your answer to two decimal places.
a firm has an a profit margin of 3.8% and an equity multiplier of 1.90. its sales are 166.0 mil usd, and the firm has total assets of 61.0 mil usd. calculate the firm's roe."
Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be?
Gardial & Son has an ROA of 12%, a 5% profit margin, and a return onequity equal to 20%. What is the company’s total assets turnover? What isthe firm’s equity multiplier?
Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's payout ratio be?
Calculate the ROE for a firm if it has a profit margin of 20%, an asset turnover of 2, and an equity multiplier of 1.4.
If Rooters, Inc., has an equity multiplier of 1.90, total asset turnover of 1.20, and a profit margin of 8 percent, what is its ROE?
A firm has a ROE of 16.875%, asset turnover of 2.5, and an equity multiplier of 1.5. If the firm has sales revenue of $10,000, what is the net income?