Business Homework Solutions
#42292
Return on assets & equity
I found the following example of return on assets and equity and was hoping someone might be able to quide me through it.
Felton Beverages maintains a profit margin of 4 percent and a sales-to-assets ratio of 3.
A. What is its return on assets?
B. If its debt-equity ratio is 1.0, its interest payments and taxes are each $10,000, and EBIT is $40,000, what is the return on equity?
Thank you for your assistance.
The solution explains how to calculate the return on equity and assets given some ratios
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