Keller Cosmetics maintains an operating profit margin of 4.5% and asset turnover

Question

Keller Cosmetics maintains an operating profit margin of 4.5% and asset turnover ratio of 2.5 a. What is its ROA? (Round your answer to 2 decimal places.) ROA b. If its debt-equity ratio is 1, its interest payments and taxes are each $7,500, and EBIT is $21,500, what is its ROE? (Do not round intermediate calculations. Round your answer to 2 decimal places.) ROE _____ % Keller Cosmetics maintains an operating profit margin of 4.5% and asset turnover ratio of 2.5 a. What is its ROA? (Round your answer to 2 decimal places.) ROA b. If its debt-equity ratio is 1, its interest payments and taxes are each $7,500, and EBIT is $21,500, what is its ROE? (Do not round intermediate calculations. Round your answer to 2 decimal places.) ROE _____ %

Explanation / Answer

Keller Cosmetics maintains an operating profit margin of 4.5% and asset turnover ratio of 2.5 a. What is its ROA? ROA= profit margin Xturnover ratio =4.5% X2.5=0.1125

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