The Taylor Company has an ROA of 7.6 percent, a profit margin of 5.2 percent, and...

Question

Question

The Taylor Company has an ROA of 7.6 percent, a profit margin of 5.2 percent, and an ROE of 14 percent. a. What is the compan

Answer 1

Answer #1

a. ROA = (Profit margin)(Total asset turnover)

0.076 = 0.052(Total asset turnover)

Total asset turnover = 1.46 times

b. ROE = (ROA)(Equity multiplier)

0.14 = 0.076(Equity multiplier)

Equity multiplier = 1.84 times

Answer 2

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