Oscar's Dog House has a profit margin of 5.6 percent, a return on assets of 12.5 percent, and an equity multiplier of 1.49. What is the return on equity?

Question

Quizplus · Accepted Answer

The return on equity (ROE) can be calculated using the formula ROE = Return on Assets (ROA) * Equity Multiplier. Given ROA = 12.5% and Equity Multiplier = 1.49, ROE = 12.5% * 1.49 = 18.625%, which rounds to 18.63 percent.

Oscar's Dog House Has a Profit Margin of 5