Homework: Chapter 4 Homework Save Score: 0 of 1 pt 4 of 6 (1 complete HW Score:

Question

Homework: Chapter 4 Homework Save Score: 0 of 1 pt 4 of 6 (1 complete HW Score: 0%, 0 of 6 pts P4-16 (similar to) (DuPont analysis) Bryley, Inc. earned a net profit margin of 4.9 percent last year and had an equity multiplier of 2.63. If its total assets are $101 million and its sales are $148 million, what is the firm's return on equity? The company's return on equity is L%. (Round to one decimal place.) Question Help Enter your answer in the answer box and then click Check Answer Clear All Check Answer

Explanation / Answer

Equity multiplier=Total assets/Total equity

Total equity=(101/2.63)=$38.40304183million

Net profit margin=net income/sales

net income=(0.049*148)=$7.252million

ROE=net incomeTotal equity

=$7.252million/$38.40304183million

which is equal to

=18.9%(Approx).

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