Question

MakeItBig, Inc. has a total assets turnover of 0.32, a profit margin of 9.64 percent, and...

MakeItBig, Inc. has a total assets turnover of 0.32, a profit margin of 9.64 percent, and a debt ratio of 0.70. The CFO, Ms Ambition, wants to double the current return on equity by making some changes. If she thinks that the profit margin can be boosted to 10 percent, and that she can generate an additional $1.00 of sales revenue generated by every dollar of assets, by how much should she decrease the debt ratio in order to double the return on equity? a. 0.43 b. 0.34 c. 0.36 d. 0.41 e. None of the above

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

as per DuPont analysis ROE = Profit margin x asset turnover x equity multiplier, rest explained in image.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Vintage, Inc. has a total asset turnover of 0.64 and a net profit margin of 3.23...
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.
Braam Fire Prevention Corp. has a profit margin of 9.70 percent, total asset turnover of 1.41,...
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?
Total assets = $780,000, debt-equity ratio = 0.62, profit margin = 5.49%, return on equity =...
Total assets = $780,000, debt-equity ratio = 0.62, profit margin = 5.49%, return on equity = 12.47%. 1) What is net income? 2) What are sales? 3) What is the return on assets? 4) What is the total asset turnover? 5) What is the equity muliplier? 6) What is the total debt ratio? Please show all steps.
Net income divided by average total assets is: Question 50 options: Profit margin. Total asset turnover....
Net income divided by average total assets is: Question 50 options: Profit margin. Total asset turnover. Return on total assets. Days' income in assets. Current ratio.
Stroud Sporting Gear Inc. has a net profit margin of 9%, a total asset turnover of...
Stroud Sporting Gear Inc. has a net profit margin of 9%, a total asset turnover of 2.4, total assets of $225 million, and total equity of $120 million. What is the company’s return on equity?
You’ve collected the following information about Sully, Inc.: Profit margin = 4.43 % Total asset turnover...
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...
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:
Current Ratio= 2.33 Operating Profit Margin= 2.3% Quick Ratio= 0.8488 Total Debt to Equity= 1.21 Inventory...
Current Ratio= 2.33 Operating Profit Margin= 2.3% Quick Ratio= 0.8488 Total Debt to Equity= 1.21 Inventory Turnover= 4.12 Return on Assets= 1% Average Collection Period= 37.79 days Return on Equity= 2.22% Total Assets Turnover= 2.31 TIE= 1.46 Select two of the ratios you derived in Corrigan Corporation. Without re-stating the formula itself, explain what the ratio means in terms of the corporation’s financial health. The industry norms are provided below to use as comparative information. Points will be awarded based...
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...
1)Stop and Shop Supermarkets has a 4.5% profit margin and a 25% dividend payout ratio. The...
1)Stop and Shop Supermarkets has a 4.5% profit margin and a 25% dividend payout ratio. The total asset turnover is 1.5 and its debt-equity ratio is 0.6. What is its sustainable rate of growth? 2)Trader Joe’s has a 9% percent return on assets and a 75% percent retention ratio. What is its internal growth rate?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT