If Roten Rooters, Inc., has an equity multiplier of 1.49, total asset turnover of 1.50, and a profit margin of 5.9 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

Question

Business

Ramon

28 August, 04:15

If Roten Rooters, Inc., has an equity multiplier of 1.49, total asset turnover of 1.50, and a profit margin of 5.9 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

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Answers (1)

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Joshua Mercer · Answer 1

ROI = 13.19%

Explanation:

Return on investment is the percentage of an investment that is realised as profit in one year. It is usually a ratio between net profit and total investment. ROI is used to estimate efficiency of different investments.

Using the following formula

ROI = Equity multiplier * Total Asset Turnover * Profit Margin

ROI = 1.49 * 1.50 * 0.059

ROI = 0.131865

ROI = 13.19%