Question

A firm’s ROE is typically not equal to its ROA. Why? When would a firm’s ROA...

A firm’s ROE is typically not equal to its ROA. Why? When would a firm’s ROA equal its ROE?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
1. What three ratios of profitability appear on a common size income statement? 2. What would...
1. What three ratios of profitability appear on a common size income statement? 2. What would explain how a firm having a high gross profit margin and a low net profit margin? 3. A firm's ROE is typically not equal to its ROA. Why? When would a firm's ROA equal its ROE?
suppose a bank finds its ROA climbing by 50%, with its ROE unchanged. ehat happened to...
suppose a bank finds its ROA climbing by 50%, with its ROE unchanged. ehat happened to its equity multiplier? why?
Compostela Ltd. has an ROA of 9% and an ROE of 15%. Its total asset turnover...
Compostela Ltd. has an ROA of 9% and an ROE of 15%. Its total asset turnover is 1.5x. What is Compostela’s profit margin? A. 5% B. 6% C. 8% D. 10% Compostela Ltd. has an ROA of 9% and an ROE of 15%. Its total asset turnover is 1.5x. What is Compostela’s debt-to-asset ratio? A. 40% B. 60% C. 68% D. 13.5% According to the Du Pont methodology, if a firm’s total assets turnover and debt ratios are reasonable compared...
Why it is not suitable to use ROA and ROE to measure the performances of financial...
Why it is not suitable to use ROA and ROE to measure the performances of financial institutions?
The ROE of Concrete Pumping Holdings, Inc. is equal to 10% and ROA is equal to...
The ROE of Concrete Pumping Holdings, Inc. is equal to 10% and ROA is equal to 8%. The firm finances only with short-term debt, long-term debt, and common equity, so assets equal total invested capital. What is the firm's total debt to total capital ratio. Select one: a. 75% b. 80% c. 20% d. 25% e. 40%
1) Financial Ration: a) Please prove the relationship between ROE and ROA by using Dupont Identity....
1) Financial Ration: a) Please prove the relationship between ROE and ROA by using Dupont Identity. b) Based on relationship between ROE and ROA, please show the proof that ROE is greater than ROA when total debt is greater than 0. c) We know ROE is 10%, capital structure ratio (TE/TD) is 0.45, please compute the ROA.
what is a consequence of a repurchase program a)ROA will increase, but will equal there will...
what is a consequence of a repurchase program a)ROA will increase, but will equal there will be no rise in stock price b)roa will increase, and the stock value will rise c)repurchase does nothing to improve the actual firm performance, no impact is made on ROA/ROE d)None of above
Faber Products has $35 million of sales and $9.75 million of net income. Its total assets...
Faber Products has $35 million of sales and $9.75 million of net income. Its total assets are $150 million. Assume the company’s total assets equal total invested capital, and its capital structure consists of 40% debt and 60% common equity. The firm’s interest rate is 4%, and its tax rate is 21%. What would happen if this firm used less leverage (debt)? (The size of the firm does not change.) a. ROA would decrease, and ROE would increase. b. ROA...
What going to happen with ROA and ROE if a company wants to do restructure of...
What going to happen with ROA and ROE if a company wants to do restructure of capital like make a bigger d/e ratio? Why? By which details?
What is a firm’s ROA if its operating margin is 31.6%, interest expense is 2.5% of...
What is a firm’s ROA if its operating margin is 31.6%, interest expense is 2.5% of sales, asset turnover is 1.8, and its tax rate is 20%? Round to the nearest 0.1%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT