Question

The company's sales revenue forecast for next year is 2.25 million euros. The net profit margin is estimated at 12%. The company's total assets are forecasted to be 1.8 million euros. Finally, Debt to equity ratio (D/E) is equal to 1.0. Find the company's approximate ROA?

(Please indicate the answer rounded to nearest whole number without percentage mark. For example for ROA=12.461% or ROA= 0.12461 answer should be entered as 12)

Answer #1

Sol:

ROA = 15

Explanation:

Note : 1. Sales assumed as Net sales.

2. Net Profit = Net Income

3. Total assets assumed as Total Average Assets.

4. Debt - Equity Ratio not required for calculation of ROA.

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