Question

What is your interpretation if you know the return on equity (ROE) of a company was 10% and its return on asset (ROA) was 5%?

Answer #1

Return on Equity : ROE is a process of financial performence calculated by devided net income by shareholders equity.

Because shareholders equity is equal to a companies assets minus its debt.

ROE = Net income / Avarage Shareholder's Equity

If the return on equity of a company was10% of its net income to shareholders for a retention ratio of 90%.

Return on Assets : ROA is measures how much profit earned a compny or an organisation relatives to its total assets.ROA gives a supervisor investors or executives an idea how much generate earning using of its assets.

ROA = Net Income / Total Assets

If ROA was 5% it means the company has invested in assets generates 5% of net income.

As the CEO of a company, you are interested in raising the ROE
(return on equity) of your firm. Explain what you would do
considering the components of the ROE as covered in this course

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...

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:

Bank A has a Return on Equity (ROE) of 18.00% and a Return on
Assets (ROA) of 2.00%. Bank B has a Return on Equity (ROE) of
19.80% and a Return on Assets (ROA) of 1.60%. Using this
information, which is of the following is NOT possible?
Group of answer choices
Bank B has an equity multiplier of 12.38
Bank B has a profit margin of 24.00% and an Asset Utilisation
Ratio of 5.60%
Bank B has a profit margin...

Return on Equity (ROE) = LTM Net Income / (LTM Equity + Last FY
Equity) / 2. Return on Assets (ROA) = LTM Net Income / Average
Assets Dividend Yield = Quarterly Dividend x 4 / Current Share
Price Suppose Q Corp has Net Income of $18M, LTM Assets of $93M,
Assets one year prior of $87M, Quarterly Dividend of $0.95, Current
Share Price of $80, LTM Equity of $58M and prior Equity of
$62M.
1. Compute ROE
2. Compute...

A firm has an ROE of 9%, a debt/equity ratio of 0.3, a tax rate
of 30%, and pays an interest rate of 6% on its debt. Firm’s asset
turnover is 0.3
-What is firm’s operating ROA?
-What is the firm’ Margin
- What is the firms Tax burden?
- What is the firm’s Leverage factor?
- Given ROA that you found, what percentage of its total ROA
firm has to pay as interest?
- What is the firm’s interest...

You have evaluated the ROA for a company, and the ROE. The ROA
is 6%, and the ROE is 15%. The industry average for the debt ratio
is .5. How does the Company’s use of debt compare to the industry
average?

What is the normal range for Return on Assets and Return on
Equity ratios? I am looking at a huge set of data and some values
for these are -200% or 4400%... I am wondering what ranges for ROA
and ROE is considered normal. Thank you!

The Florida Diving Company had a return on equity (ROE) of 5%
this past year. Dividends were paid of $10,000, and the company’s
net income was $50,000. If the company has 100,000 shares
outstanding with a current market price of $20 per share, what is
the required rate of return?

A firm has an ROE of 4%, a debt/equity
ratio of 1.0, a tax rate of 20%, and an interest rate on debt of
5%. What is its operating ROA?

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