Please verify and explain
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?
My answers are:
Am I correct? If not please explain where I went wrong.© BrainMass Inc. brainmass.com June 3, 2020, 6:29 pm ad1c9bdddf
Your answers are not correct. You have to calculate the return on assets and equity. The return is expressed as a percentage and is a percentage of net income.
See below the calculations
Annual Sales = $500 million
Profit Margin = Net ...
The solution explains the calculation of return on assets and debt/equity ratio for Lily Cosmetics