Question

One. The famous Dupont Identity breaks Return on Equity (ROE) into three components: Profit Margin, Total...

One. The famous Dupont Identity breaks Return on Equity (ROE) into three components: Profit Margin, Total Asset Turnover, and Financial Leverage (Assets/Equity).

French Corp. has an Asset/Equity ratio of 1.55. Their current Total Asset Turnover has recently fallen to 1.20, bringing their ROE down to 9.1%

a) What is this firm's Profit Margin?

B) If the company were able to improve its Total Asset Turnover to 1.8, what would be their new ROE?

Two. Sousa, Inc., has Sales of $37.3 million, Total Assets of $26.5 million, and Total Debt of $11.3 million. The company's Profit Margin is 6 percent.

a) What is the company's Net Income?

b) What is the ROA c) What is the ROE?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The DuPont System determines the ROE of a firm as the product of the firm's profit...
The DuPont System determines the ROE of a firm as the product of the firm's profit margin, equity multiplier, and it's______. Question 40 options: Current Ratio Inventory Turnover Total Asset Turnover Fixed Asset Turnover
Problem TWO: Total Asset Turnover (TAT) 3.0xx Return on Assets (ROA) 9.0000% Return on Equity (ROE)...
Problem TWO: Total Asset Turnover (TAT) 3.0xx Return on Assets (ROA) 9.0000% Return on Equity (ROE) 12.0000% Find: Profit Margin: Debt Ratio:
I calculated the dupont model for Ford 2001 & GM 2001. I calculated the profit margin,...
I calculated the dupont model for Ford 2001 & GM 2001. I calculated the profit margin, asset turnover, financial leverage and ROE to be as follows. Can someone verify the following to see if I did it correctly: Profit Margin (PM) = Net income / Sales PM Ford 2001 = 65,453 / 162,412 = -0.336 PM GM 2001 = 601 / 177,260 = .0033 Asset Turnover (AT) = Sales / Average total assets AT Ford 2001 = 162,412 / ((276,543...
Firm A has a return on Equity (ROE) equal to 24%, while firm B has an...
Firm A has a return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total liabilities ratio (Total liabilities/Assets) equal to 0.8. Firm A has an asset turnover ration of 0.8, while firm B has an asset turnover ratio equal to 0.4. From this information, which of the two firms has a higher profit margin? Show calculations and profit margins for both firms. (Hint: Use Dupont equation)
Consider a firm with a net profit margin of 4.2%, a total asset turnover of 1.4,...
Consider a firm with a net profit margin of 4.2%, a total asset turnover of 1.4, total assets of $40 million, and a book value of equity of 20 million. What is the firm’s current ROE? If the firm increased its net profit margin to 5%, what should be its ROE? What would be the effect of buying back 5 million of equity with new debt? What would be its new ROE?
QUESTION 11 What is return on assets? It is net income / total equity. It is...
QUESTION 11 What is return on assets? It is net income / total equity. It is sales / total assets. It is net income / total assets. It is sales / total equity. 1 points    QUESTION 12 Nvidia has the net profit margin of 32.20% while the industry average net profit margin is 13.51%. Based on the findings, Nvidia underperforms its peers in terms of leverage. Nvidia underperforms its peers in terms of profitability. Nvidia outperforms its peers in...
​(DuPont analysis)  Triangular Chemicals has total assets of $100 ​million, a return on equity of 39...
​(DuPont analysis)  Triangular Chemicals has total assets of $100 ​million, a return on equity of 39 ​percent, a net profit margin of 4.6 ​percent, and an equity multiplier of 2.49. How much are the​ firm's sales?The​ company's total sales are ​$nothing million.  ​(Round to one decimal​ place.)
Consider a retail firm with a net profit margin of 3.74 %​, a total asset turnover...
Consider a retail firm with a net profit margin of 3.74 %​, a total asset turnover of 1.88​, total assets of $ 43.4 ​million, and a book value of equity of $ 18.3 million. a. What is the​ firm's current​ ROE? b. If the firm increased its net profit margin to 4.45 %​, what would be its​ ROE? c.​ If, in​ addition, the firm increased its revenues by 22 % ​(maintaining this higher profit margin and without changing its assets...
Consider a retail firm with a net profit margin of 3.35 %​, a total asset turnover...
Consider a retail firm with a net profit margin of 3.35 %​, a total asset turnover of 1.79​, total assets of $ 43.1 ​million, and a book value of equity of $ 17.5 million. a. What is the​ firm's current​ ROE? b. If the firm increased its net profit margin to 4.08 %​, what would be its​ ROE? c.​ If, in​ addition, the firm increased its revenues by 25 % ​(maintaining this higher profit margin and without changing its assets...
Calculate Return on equity (ROE), Return on assets (ROA), Net Profit Margin (NPM), Debt ratio, and...
Calculate Return on equity (ROE), Return on assets (ROA), Net Profit Margin (NPM), Debt ratio, and Total assets turnover for 2018 and 2019. Explain why ROE is lower in 2019 than in 2018 (explain in terms of each ratio in DuPont equation for ROE). Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 Assets 2018 2019 Sales Revenue $2,580 $2,865 Cash $70 $50 Less: Cost of goods sold $1,060 $1,500 Short-Term investments $35 $9 Less: Operating Expenses...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT