Question

A company has sales of $640,000, net profit after taxes of $23,000, a total asset turnover of 4. 17 and an equity multiplier of 1. 67. what is the return on equity?

Answer 1

A corporation has $$640,000$ in sales, $$23,000$ in net profit after taxes, a $4.17$total asset turnover, and a$1.67$ equity multiplier. response is$9%.$%

The ratio of a company's net income to the equity of its shareholders is known as return on equity (ROE). A company's profitability and the effectiveness of its revenue generation are measured by its return on equity (ROE). The better a corporation is at turning its equity financing into profits, the higher its ROE.

Return on Asset is expressed as a percentage of the total return an organization generates in relation to its total assets. The return on asset calculation formula is.

Return on assets is calculated as Net Profit After Taxes by Asset Turnover and Sales multiplied by$100$. For example, Return on Assets is $$23,000*2.5$by$640000*100$ Return on Assets is $$57,500/640000*100$ Return

Learn more about equity here.

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