A firm has a net profit margin of 4%, a total asset turnover ratio of 5 and an equity multiplier of 1.2. Its return on equity is

Name: A firm has a net profit margin of 4%, a total asset turnover ratio of 5 and an equity multiplier of 1.2. Its return on equity is
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Question

Quizplus · Accepted Answer

The return on equity (ROE) can be calculated using the DuPont formula, which is ROE = Net Profit Margin * Total Asset Turnover * Equity Multiplier. Plugging in the given values: ROE = 4% * 5 * 1.2 = 24%.

A Firm Has a Net Profit Margin of 4%, a Total