company x has profit margin of 5% total assets turnover of 2 and total long-term debt...

Question

Question

company x has profit margin of 5% total assets turnover of 2 and total long-term debt to total assets ratio of 50, what is the company’s ROE

Answer 1

Answer #1

as per Dupont equation,

ROE = Net profit Margin * Asset turnover ratio * financial leverage

= 5%*2*(50)

=5%

Answer 2

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