Question

The company's sales revenue forecast for next year is 2.25 million euros. The net profit margin...

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)

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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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