Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its total assets turnover? What is its equity multiplier?
Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its total assets turnover? What is its equity multiplier?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its
total assets turnover? What is its equity multiplier?
Expert Solution
Step 1
Given
ROA = 12%
Profit margin = 3%
Return on equity = 15.50%
Return on Assets (ROA) = Profit Margin * Total Assets Turnover
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