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A Firm Has a Net Profit/pretax Profit Ratio of 0

Question 42

Multiple Choice

A firm has a net profit/pretax profit ratio of 0.6, a leverage ratio of 1.5, a pretax profit/EBIT of 0.7, an asset turnover ratio of 4, a current ratio of 2, and a return-on-sales ratio of 6%. Its ROE is ________.


A) 7.56%
B) 15.12%
C) 20.16%
D) 30.24%

Correct Answer:

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