Sandhill, Inc., a manufacturer of electrical supplies, has an ROE of 23.1 percent, a profit margin of 3.00 percent, and a total asset turnover ratio of 2.00 times. Its peer group also has an ROE of 23.1 percent, but has outperformed Sandhill with a net profit margin of 3.3 percent and a total asset turnover ratio of 2.0 times. Calculate the Sandhill's equity multiplier and peer group equity multiplier. (Round answers to 2 decimal places, e.g.12.55.) Sandhill’s equity multiplier is times, and the peer group equity multiplier is times.
Sandhill, Inc., a manufacturer of electrical supplies, has an ROE of 23.1 percent, a profit margin of 3.00 percent, and a total asset turnover ratio of 2.00 times. Its peer group also has an ROE of 23.1 percent, but has outperformed Sandhill with a net profit margin of 3.3 percent and a total asset turnover ratio of 2.0 times. Calculate the Sandhill's equity multiplier and peer group equity multiplier. (Round answers to 2 decimal places, e.g.12.55.) Sandhill’s equity multiplier is times, and the peer group equity multiplier is times.
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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Sandhill, Inc., a manufacturer of electrical supplies, has an
| Sandhill’s equity multiplier is times, and the peer group equity multiplier is times. |
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Equity Multiplier is ratio that show leverage of an entity. It is computed by dividing total assets by equity of an entity.
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