If Roten Rooters, Inc., has an equity multiplier of 1.64, total asset turnover o
ID: 2813641 • Letter: I
Question
If Roten Rooters, Inc., has an equity multiplier of 1.64, total asset turnover of 1.90, and a profit margin of 4.4 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
If Roten Rooters, Inc., has an equity multiplier of 1.64, total asset turnover of 1.90, and a profit margin of 4.4 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Explanation / Answer
ROE=profit margin* total asset turnover * equity multiplier
=(0.044*1.9*1.64)
which is equal to
=13.71%(Approx).