Du pont. Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation a. Butters Corporation has a profit margin of 7.5 percent and its return on assets (investment) is 21.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) Assets turnover ratio b. If the Butters Corporation has a debt-to-total-assets ratio of 50.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) Return on equity c. What would happen to return on equity if the debt-to-total- assets ratio decreased to 35.00 percent? (Input your answer as a percent rounded to 2 decimal places.) Return on equity
Du pont. Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation a. Butters Corporation has a profit margin of 7.5 percent and its return on assets (investment) is 21.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) Assets turnover ratio b. If the Butters Corporation has a debt-to-total-assets ratio of 50.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) Return on equity c. What would happen to return on equity if the debt-to-total- assets ratio decreased to 35.00 percent? (Input your answer as a percent rounded to 2 decimal places.) Return on equity
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 8P
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Transcribed Image Text:Du pont. Using the Du Pont method, evaluate the effects of the
following relationships for the Butters Corporation
a. Butters Corporation has a profit margin of 7.5 percent and its
return on assets (investment) is 21.5 percent. What is its assets
turnover? (Round your answer to 2 decimal places.) Assets
turnover ratio
b. If the Butters Corporation has a debt-to-total-assets ratio of
50.00 percent, what would the firm's return on equity be? (Input
your answer as a percent rounded to 2 decimal places.) Return on
equity
c. What would happen to return on equity if the debt-to-total-
assets ratio decreased to 35.00 percent? (Input your answer as a
percent rounded to 2 decimal places.) Return on equity
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