Easter Egg and Poultry Company has $1,370,000 in assets and $610,000 of debt. It

Question

Easter Egg and Poultry Company has $1,370,000 in assets and $610,000 of debt. It reports net income of $191,000.     
  
a. What is the firm’s return on assets? (Enter your answer as a percent rounded to 2 decimal places.)
  

b. What is its return on stockholders’ equity? (Enter your answer as a percent rounded to 2 decimal places.)
  

  

c. If the firm has an asset turnover ratio of 1.5 times, what is the profit margin (return on sales)? (Enter your answer as a percent rounded to 2 decimal places.)
  

Explanation / Answer

a.

Return on assets=191000/1370000=13.94%

b.

Return on equity=191000/(1370000-610000)=25.13%

c.

sales=asset turnover ratio*assets=1.5*1370000=2055000

profit margin=191000/2055000=9.29%

the above is answer..

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