A Company uses the DuPont system to analyze its financial performance. The following data is available: Metric Value Leverage ratio (assets/equity) 2.8 Total asset turnover 2.5 Net profit margin 3.5% Dividend payout ratio 30.0% Required: Calculate Return on Equity (ROE) using the DuPont formula.

A Company uses the DuPont system to analyze its financial performance. The following data is available: Metric Value Leverage ratio (assets/equity) 2.8 Total asset turnover 2.5 Net profit margin 3.5% Dividend payout ratio 30.0% Required: Calculate Return on Equity (ROE) using the DuPont formula.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Liquidity ratios: current ratio; quick, or acid test,...

See similar textbooks

Related questions

Q: General Accounting

A: Detailed explanation:Given: Budgeted Overhead, $ 510,200Estimated direct labor hours, 22,400 hours…

Q: I want to this question answer general accounting

A: Step 1: Define Production Time PercentageProduction time percentage measures how often the factory…

Q: Correct answer

A: Explanation of Revenue: Revenue represents the total amount of money a company earns from its…

Q: Compute the level of the firm's accounts receivable

A: Explanation of Days Sales Outstanding (DSO): Days Sales Outstanding is a key financial metric that…

Q: Solve this question and accounting question

A: Step 1: Definition of Special Order DecisionA special order decision evaluates whether a company…

Q: given answer

A: Step 1: Definition of Days' Sales in ReceivablesDays' sales in receivables, also known as accounts…

Q: Compute the overhead rate using the traditional approach

A: Explanation of Traditional (Plantwide) Overhead Rate: The traditional plantwide overhead rate is a…

Q: Need help

A: Explanation of Gain on Sale of Equipment:The gain on the sale of equipment is the difference between…

Q: Help this question solution

A: Step 1: Define Cost-Volume-Profit (CVP) AnalysisThe CVP analysis is handy in figuring out the costs…

Q: Crane Company sponsors a defined benefit pension plan. The corporation's actuary provides the…

A: (a) Actual Return on Plan AssetsThe actual return on plan assets is given by:Ending Plan…

Q: Overhead controllable variance? Accounting

A: Step 1: Define Favorable varianceFavorable variance describes the extra value of income over…

Q: Question no 14

A: Concept of Book ValueBook value represents the recorded value of an asset in a company's accounting…

Q: What is the true option? ? General Accounting

A: Step 1: DefinitionThe Return on Investment (ROI) measures how efficiently a company uses its…

Q: What is the direct labor rate variance

A: Concept of Direct Labor Rate VarianceDirect Labor Rate Variance measures the difference between the…

Q: Don't use ai given answer accounting questions

A: Step 1: Definition of Direct Labor Rate VarianceThe Direct Labor Rate Variance measures the…

Q: Financial Accounting

A: Step 1: Define Return on Equity (ROE)The Return on Equity (ROE) is a financial ratio that measures…

Q: What was sales revenue for the year?

A: Explanation of Assets: Assets are economic resources owned by a company that have value and can…

Q: Kim company plans to sell

A: Concept of Contribution MarginContribution margin is the difference between a product's selling…

Q: MCQ

A: Explanation of Retained Earnings: Retained earnings represent the cumulative profits that a company…

Q: final answer general accounting

A: Step 1: Definition of Return on EquityReturn on equity is a yardstick that measures the magnitude of…

Q: What is the companys plant-wide overhead rate?

A: Explanation of Plantwide Overhead Rate:The Plantwide Overhead Rate is a method of allocating…

Q: Need answer the financial accounting question

A: Step 1: Define Fixed Overhead DeferredUnder absorption costing, fixed manufacturing overhead is…

Q: Carlisle Industries has a cash cycle of 50.2 days, an operating cycle of 74 days, and an inventory…

A: Step 1: Definition of Accounts Receivable and Accounts Payable BalanceAccounts Receivable Balance:…

Q: Determine the direct labor cost budget for 2015 on these general accounting question?

A: Step 1: Define Direct Labor Cost BudgetThe direct labor cost budget estimates the total wages paid…

Q: correct answer please

A: Step 1: Definition of Direct LaborDirect labor refers to the amount of wages of the persons who are…

Q: Tutor please provide answer

A: Explanation of High-Low Method:The High-Low Method is a technique used in cost accounting to…

Q: Provide solution this financial accounting question

A: Step 1: Define Owner's Capital BalanceThe owner's capital balance represents the total equity an…

Q: None

A: Step 1: The overall effect on the company's monthly net operating income due to the increase in…

Q: Provide correct solution and accounting

A: Step 1: Define Profit marginProfit margin is calculated as return on investment multiply by…

Q: Total manufacturing costs

A: Explanation of Direct Materials Used:Direct materials used refer to the raw materials that are…

Q: Provide answer general Accounting question

A: Step 1: Define Price-Earnings (P/E) RatioThe Price-Earnings (P/E) Ratio is a financial metric used…

Q: The spending variance for administrative expenses was

A: Explanation of Spending Variance:Spending variance refers to the difference between the actual cost…

Q: Kindly help me with accounting questions

A: Step 1: Definition of Predetermined Overhead Rate & Applied OverheadPredetermined Overhead Rate…

Q: The amount of gross profit

A: Concept of Absorption CostingAbsorption costing is a costing method that includes all manufacturing…

Q: None

A: Predetermined overhead rate as a percent of direct laborThe predetermined overhead rate based on…

Q: Can you please solve this

A: Variable costing refers to a method of determining the cost of inventories produced wherein the…

Q: Which of the following amount would be debited to the land account?

A: Step 1: Definition of Fixed Assets and Cost AllocationFixed assets are long-term tangible assets…

Q: A mund te ma tregoni detyren

Q: Can you help me with accounting questions

A: Step 1: Calculation of price differenceSelling Position = 95.18Buying Position = 94.75Price…

Q: The cost per equipment unit of direct material is

A: Explanation of Cost per Equivalent Unit:The cost per equivalent unit represents the cost assigned to…

Q: help me to solve this questions this answer

A: Step 1: Definition of Predetermined Overhead RateThe predetermined overhead rate is an estimated…

Q: Subject: financial accounting

A: Explanation of Cash Conversion Cycle: The cash conversion cycle (CCC) measures how long it takes a…

Q: None

A: Step 1: Definition of Gross Margin RatioThe Gross Margin Ratio measures the percentage of sales…

Q: Vijay Corporation distributes property to its sole shareholder, Leo. The property has a fair market…

A: Explanation of Fair Market Value (FMV): Fair Market Value represents the price at which property…

Q: Accounting 24

A: Step 1: Define Given DataSelling price per unit (P): $140Variable cost per unit (V): $110Fixed costs…

Q: Give me true answer this general accounting question

A: Step 1: Define Variable Overhead Rate VarianceThe Variable Overhead Rate Variance measures the…

Q: 4 POINT

A: Explanation of Contribution Margin:Contribution Margin is the portion of sales revenue that remains…

Q: correct answer please

A: Step 1: Definition of Average Collection PeriodThe average collection period measures the number of…

Q: provide correct answer general accounting

A: Step 1: Analysis of information givenBeginning Accounts Payable (Jan 1, 2023) = $45,000Ending…

Q: General accounting

A: Step 1: Definition of Required MetricsProfit Margin: Measures how much profit a company generates…

Question

100%

Solve this financial accounting problem

A Company uses the DuPont system to analyze its financial
performance. The following data is available:
Metric
Value
Leverage ratio (assets/equity) 2.8
Total asset turnover
2.5
Net profit margin
3.5%
Dividend payout ratio
30.0%
Required:
Calculate Return on Equity (ROE) using the DuPont formula.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Using the statements provided Calculate the following liquidity ratios: Current ratio Quick ratio Calculate the following asset management ratios: Average collection period Inventory turnover Fixed asset turnover Total asset turnover Calculate the following financial leverage ratios Debt to equity ratio Long-term debt to equity Calculate the following profitability ratios: Gross profit margin Net profit margin Return on assets Return on stockholders’ equity For example: you should present it like the text, or as:Gross margin = 1,933 divided by 8,689 = 22.2% A competitor of ACME has for the same time period reported the following three ratios: Current ratio 1.52Long-term debt to equity .25 or 25%Net profit margin .08 or 8% Given these three ratios only which company is performing better on each ratio? Also overall who would you say has the best financial performance and position. Support your answer.
DuPont system of analysis Use the following financial information for AT&T and Verizon to conduct a DuPont system of analysis for each company. Sales Earnings available for common stockholders Total assets Stockholders' equity a. Which company has the higher net profit margin? Higher asset turnover? b. Which company has the higher ROA? The higher ROE? c. Which company has the higher financial leverage multiplier? a. Net profit margin (Round to three decimal places.) AT&T Net profit margin AT&T $164,000 13,333 403,921 201,934 Verizon Verizon $126,280 13,608 244,280 24,232
a)Please calculate the all ratios of companies - Profitability ratios(Profit margin, Return on assets ,Return on equity) Asset utilization ratios (Receivables turnover, Average collection period, Inventory turnover, Fixed asset turnover, Total asset turnover) Liquidity ratios (Current ratio, Quick ratio) & Debt utilization ratios (Debt total assets, Times interest earned, Fixed charge coverage) b) Calculate all your ratios in and Excel File. You need to show all your calculations in excel file but use the calculated value in your main report. [Note:The answer should be based on "Canadian national railway annual report 2016 and 2017"]
Please answer the following requirements on these financial accounting question
Use the DuPont system and the following data to find return on equity. (Do not roun intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio Return on equity 2.9 2.7 6.2 % 33.2 % %
You have access to the following information and want to calculate the debt-to-equity ratio for the firm. Return on Equity: 23.87% Profit Margin: 13.81% Total Asset Turnover: 0.65 Answer as a DECIMAL using two decimal places.
Return on equity (ROE) using the traditional DuPont formula equals to A. (net profit margin) (interest component) (solvency ratio) B. (net profit margin) (interest component) (liquidity ratio) C. (net profit margin) (total asset turnover) (quick ratio) D. (net profit margin) (total asset turnover) (solvency ratio)
I need help
Earning.
Using the Du Pont Identity Method, calculate return on equity given the following information. Profit margin 16%; total asset turnover 0.85; equity multiplier 1.5. OA. OB. O C. O D. OE 20.40% 21.40% 22.40% 23.40% 24.40%
please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) How do I find “Return on Equity” when all I have are these numbers: profit margin 8.90% capital intensity ratio 0.50 debt equity ratio 0.65 net income 100,000.00 dividends 47,500.00
Please help