A manufacturing company has a Return on assets (ROA) of 10%, a 2% Profit Margin (PM), and a return on equity (ROE) that is equal to 15%.

**Answer the following accounting questions with the above information:**

**What is the company’s total assets turnover?**

**What is the firms Equity Multiplier?**

**Accounting Answer:**

Return on Equity (ROE) = 15%

Return on Assets = 10%

Profit Margin = 2%

Equity Multiplier = Need to Solve for

Total Assets Turnover = Need to Solve for

__Use the following accounting equations and financial ratios:__
Return on Equity (ROE) = Return on Assets (ROA) X Equity Multiplier

15% = 10% * E.M

**Equity Multiplier = 15/10 = 1.5**

Return on Assets (ROA) = Proft Margin X Total Assets Turnover

10% = 2%
X Total Assets Turnover

**Total Assets Turnover**

**= 10/2 = 5**

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