A company's net profit margin is 6%, its total asset turnover is 1.8 times, and its debt ratio is 25%. What is the company's return on equity (ROE)? a. 10.80% b. 12.60% c. 14.40% d. 16.20% e. 18.00%

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 6P
icon
Related questions
Question
100%

Financial Accounting Question

A company's net profit margin is 6%, its total asset turnover is 1.8 times, and
its debt ratio is 25%. What is the company's return on equity (ROE)?
a. 10.80%
b. 12.60%
c. 14.40%
d. 16.20%
e. 18.00%
Transcribed Image Text:A company's net profit margin is 6%, its total asset turnover is 1.8 times, and its debt ratio is 25%. What is the company's return on equity (ROE)? a. 10.80% b. 12.60% c. 14.40% d. 16.20% e. 18.00%
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College