Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 5, Problem 7SE
To determine
Calculate company’s return on assets and return on equity.
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If a company has an equity multiplier of 2.00, total asset turnover of 1.97, and a
profit margin of 4.4 percent. What is its ROE? Leave as a percent and round to two
places past the decimal point.
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You have access to the following information and want to calculate the debt-to-equity ratio for the firm.
Return on Equity: 23.87%
Profit Margin: 13.81%
Total Asset Turnover: 0.65
Answer as a DECIMAL using two decimal places.
If Roten Rooters, Inc., has an equity multiplier of 1.28, total asset turnover of 1.85, current ratio of 2.28, and profit margin of 11.9 percent, then its ROE is _______%. Round it to two decimal places.
Chapter 5 Solutions
Principles of Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 1SECh. 5 - Prob. 2SECh. 5 - Tell whether each of the following accounts is a...
Ch. 5 - Prob. 4SECh. 5 - Prob. 5SECh. 5 - Prob. 6SECh. 5 - Prob. 7SECh. 5 - The lettered items that follow represent a...Ch. 5 - Each of the statements that follow violates one or...Ch. 5 - The lettered items that follow represent a...Ch. 5 - Prob. 4EACh. 5 - Prob. 5EACh. 5 - Prob. 6EACh. 5 - Prob. 7EACh. 5 - Prob. 8EACh. 5 - Prob. 1PCh. 5 - The information that follows is from Jasons...Ch. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5APCh. 5 - The information that follows is from Matts...Ch. 5 - Prob. 7APCh. 5 - The information that follows is from Rodriguezs...Ch. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Prob. 5C
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- A firm has a return on equity of 27 percent. The total asset turnover is 1.6 and the profit margin is 6 percent. The total equity is $4,520. What is the amount of the net income?arrow_forwardWhat are the annual sales for a firm with $805,853 in total liabilities, a total debt ratio of 0.84, and an asset turnover of 1.5? Numeric Responsearrow_forwardWhat are the annual sales for a firm with $800,000 in debt, a total debt ratio of .06, and an asset turnover of 2?arrow_forward
- If Average assets and capital are 900,000 and 540,000, respectively, with a net income of 47,520, what is the return on equity?arrow_forwardUse the following information to complete the balance sheet below. Sales are $8.7 million, capital intensity ratio is 2.00 times, debt ratio is 65 percent, and fixed asset turnover ratio is 1.20 times. Note: Enter your answers in millions of dollars rounded to 2 decimal places. Current Assets = ? Fixed Assets = ? Total assets = ? Total liabilities = ? Total equity = ? Total liabilities and equity = ?arrow_forwardIf a company's net profit margin is-5 percent, its total asset turnover is 1.5 times, and its financial leverage ratio is 1.2 times, its return on equity is closest to: O-9.0 percent. O-7.5 percent. O-3.2 percent. O 1.8 percent.arrow_forward
- High mountain foods has an equity multiplier of 1.72 a total asset turnover of 1.16 and a profit margin of 4.5 percent. What is the return on assets?arrow_forwardUsing 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.)arrow_forwardFor the year ended December 31, 2022, Settles Incorporated earned an ROI of 7.2%. Sales for the year were $11 million, and average asset turnover was 1.8. Average stockholders' equity was $3.1 million. Required: a. Calculate Settles Incorporated's margin and net income. Note: Round "Margin" answer to 1 decimal place. Enter the net income answer in dollars, i.e., $5 million should be entered as 5,000,000. b. Calculate Settles Incorporated's return on equity. Note: Round your answer to 1 decimal place. a. Margin a. Net income b. Return on equity %arrow_forward
- 1.If Gwen, Inc. has a total debt ratio of 0.8, a total asset turnover of 0.33, and a net profit margin of 10%. Calculate the return on equity (ROE). Enter percentages as decimals and round to 4 decimals.arrow_forwardThe lawrence company has a ratio of long term debt to long term debt plus equity of .25 and a current ratio of 1.5. current liabilities are 900, sales are 6230 , profit margin is 8.1 percent what is the amount of the firms net fixt assets ?arrow_forwardFirm C has net income of $136,000, turnover of 1.91, and ROI of 23.90%. Calculate the firm's margin, sales, and average total assets. (Round "Margin" answer to 1 decimal place and use the rounded answer for the subsequent computations.)arrow_forward
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