Top 1. This year Andrews achieved an ROE of 24.0%. Suppose next year the profit
ID: 2616464 • Letter: T
Question
Top
1. This year Andrews achieved an ROE of 24.0%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Andrews's ROE?
2. The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin makes plant improvements:
3. The Digby's workforce complement will grow by 10% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Digby spends the same amount extra above the $1,000 recruiting base as they did last year.
HR/TQM ReportExplanation / Answer
1)ROE=(Net income/sales)*(sales/assets)*(assets/equity)
ROE will increase since the other two components of formuale remains same
2)It is a use of cash, and will be shown in the investing section as a subtraction.