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Calculating ROA and ROE for finance.

Lily Cosmetics has annual sales of $500,000,000
maintains a net after tax profit margin of 5%
and has a sales-to-assets ratio of 4

a. What is its return on assets?

b. If its debt/equity ratio is 0.5, what is the return on equity?

Solution Summary

This solution is comprised of a detailed explanation to answer what is its return on assets and return on equity.