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

100%

Managerial 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?

Definition Definition Process by which financial information is analyzed, interpreted, and communicated to managers to support the achievement of an organization's goals. The main objective of managerial accounting is to maximize profits and minimize losses.

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