Ask Question
24 August, 09:10

Computer Geeks has sales of $618,900, a profit margin of 13.2 percent, a total asset turnover rate of 1.54, and an equity multiplier of 1.06. What is the return on equity?

+1
Answers (1)
  1. 24 August, 11:43
    0
    It is 21.55%

    Explanation:

    Profit = 13.2% * $618,900

    =$81,694.80

    Asset turnover ratio = Sales/Total Assets

    Total Assets = Sales/Asset turnover ratio

    = $618,900/1.54

    = $401,883.12

    Equity Multiplier = Total Assets / Total stock's holder equity

    Total stock's holder equity = Total Assets / Equity Multiplier

    = $401,883.12 / 1.06

    = $379,135

    Return on Equity = Profit / Total stock's holder equity

    = ($81,694.80/$379,135) * 100%

    =21.55%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Computer Geeks has sales of $618,900, a profit margin of 13.2 percent, a total asset turnover rate of 1.54, and an equity multiplier of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers