Ask Question
BusinessBusiness
25 September, 14:42

If we know that a firm has a net profit margin of 4.6 % , total asset turnover of 0.62 , and a financial leverage multiplier of 1.54 , what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?

+3
Answers (1)
  1. 25 September, 16:15
    0
    4.39%

    Explanation:

    Using DuPont equation in computing for ROE enables further analysis of the company's strengths and weaknesses. By using this equation, ROE is segregated into different drivers of ROE that focus on key metrics of financial performance. These metrics focus on operational efficiency (Net Profit margin), asset use efficiency (Total Asset Turnover) and financial leverage (Equity or Financial Multiplier). Further, this provides information that will be used by the company in its planning activities.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If we know that a firm has a net profit margin of 4.6 % , total asset turnover of 0.62 , and a financial leverage multiplier of 1.54 , what ...” 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
You Might be Interested in
When asked to provide an estimate of an irrigation system, Pete looked from one end of the field to the other, licked a finger and held it in the air, squinted into the sun and said $25,000, give or take 30%.
Answers (1)
Sayed's employer is currently developing a new marketing strategy. The top managers have developed the marketing strategy and have given it to Sayed so that he can now develop an implementation plan.
Answers (1)
A benched excavation is generally used A) on open suburban sites. B) on tight downtown sites. C) where the excavation depth is less than 5 ft. D) where dewatering of the site is not required.
Answers (2)
Nori can be purchased from international suppliers in Korea and China and from local suppliers. A number of factors must be considered when choosing a supplier, and often concessions must be made.
Answers (1)
In determining total manufacturing costs on the cost of goods manufactured schedule, a. ending work in process inventory is deducted from beginning work in process inventory. b. actual manufacturing overhead costs appear as a deduction. c.
Answers (1)
New Questions in Business
Nonprofit organizations differ from profit organizations in that nonprofit organizations: Group of answer choices target the niches that may be most profitable.
Answers (1)
1. The closing entry for the Loss on Plant Assets account includes a debit to (A) Retained Earnings. (B) Income Summary. (C) Loss on Plant Assets. (D) Gain on Plant Assets.
Answers (1)
An employee earns $2,000.00 per month in gross pay, but pays $104.36 for health insurance, 9% in federal taxes, for state taxes, and 2% for local taxes. What is the employee's net pay?
Answers (1)
The board of directors for tundrapro, inc., is searching for a new ceo. the firm is in need of new direction after suffering several years of declining performance and increasingly demoralized management and employees.
Answers (1)
During the year, a company had the cash flows listed below. What was the total net cash flow for the year?
Answers (1)
Home » Business » If we know that a firm has a net profit margin of 4.6 % , total asset turnover of 0.62 , and a financial leverage multiplier of 1.
Sign Up Forgot Password?