During the last year, a company had sales of $300,000 and a net income of $20,000, and its year-end assets were $200,000. The firm's total debt to total assets. ratio was 40%. Based on the DuPont equation, what was the firm's ROE?

During the last year, a company had sales of $300,000 and a net income of $20,000, and its year-end assets were $200,000. The firm's total debt to total assets. ratio was 40%. Based on the DuPont equation, what was the firm's ROE?

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 12P: The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days’ sales outstanding of...

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Question

General Accounting

During the last year, a company had sales of $300,000
and a net income of $20,000, and its year-end assets
were $200,000. The firm's total debt to total assets.
ratio was 40%. Based on the DuPont equation, what
was the firm's ROE?

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