Question

24. If a firm’s net profit margin is 10.1%, asset turnover is 1, and the debt ratio is 0.78, what is the firm’s return on equity (ROE)? Round to the nearest 0.1%, drop the % symbol. E.g., if your answer is 25.74%, record it as 25.7.

Answer #1

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?

Vintage, Inc. has a total asset turnover of 0.64 and a net
profit margin of 3.23 percent. The total assets to equity ratio for
the firm is 2.0. Calculate Vintage’s return on equity.

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 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...

Braam Fire Prevention Corp. has a profit margin of 9.70
percent, total asset turnover of 1.41, and ROE of 18.75 percent.
What is its firm's debt-equity ratio?

if we know that a firm has a net profit margin of 4.5%, total
asset turnover of 0.72, and a financial leverage multiplier of
1.24, what is its ROE? What is the advantage to using the DuPont
system to calculate ROE over the direct calculation of earnings
available for common stockholders divided by common stock
equity?

If we know that a firm has a net profit margin of
4.2%, total asset turnover of 0.62, and a financial leverage
multiplier of 1.37,
what is its ROE? What is the advantage to using the DuPont system
to calculate ROE over the direct calculation of earnings available
for common stockholders divided by common stock equity?

You’ve collected the following information about Sully,
Inc.:
Profit margin
=
4.43
%
Total asset turnover
=
3.40
Total debt ratio
=
.26
Payout ratio
=
28
%
What is the sustainable growth rate for the company? (Do
not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
Sustainable growth rate
%
What is the ROA? (Do not round intermediate calculations
and enter your answer as a percent rounded to...

Assume the following ratios are constant. Total asset turnover =
2.30 Profit margin = 5.8 % Equity multiplier = 1.77 Payout ratio =
35 % What is the sustainable growth rate? (Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.) Sustainable growth
rate

Assume the following ratios are constant.
Total asset turnover
=
2.23
Profit margin
=
5.1
%
Equity multiplier
=
1.70
Payout ratio
=
48
%
What is the sustainable growth rate? (Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Sustainable growth rate ________ %

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