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
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Wims Inc., has sales of $18.3 million total assts of $13.3 million and total debt of $4.1 million. The profit margin is 11 percent. 

a. What is the company's net income? 

b. What is the company's ROA?

c. What is the company's ROE?

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The term net income can be defined as the excess of revenues over the expenses of the company & it generally appears at the bottom of the income statement. Profit margin on the other hand is the ratio of net income to the company's sales & is usually shown in the form of percentage. Higher margin is a good indication of higher profitability.

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