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    Return on assets

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    Need help in solving these problems:

    1. Given the following financial data: net income/sales = 5%; sales/total assets = 2.5; debt/total assets = 60 percent; compute:
    a. Return on assets.
    b. Return on equity.

    2. Explain in problem 1 why return on equity was so much higher than return on assets.

    3. A firm has assets of $1,200,000 and turns over two times per year. Return on assets is 15%. What is its profit margin (return on sales)?

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    https://brainmass.com/business/finance/return-assets-du-pont-224014

    Solution Preview

    1. Given the following financial data: net income/sales = 5%; sales/total assets = 2.5; debt/total assets = 60 percent; compute:
    a. Return on assets= Net income/Total assets
    = net income/sales * sales/total assets ...

    Solution Summary

    The response describes the steps to compute the Return on assets.

    $2.19

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