Using the annual report information available on each of the company's websites: compute the ROE for Yahoo and Google.
Please show calculations.© BrainMass Inc. brainmass.com October 25, 2018, 6:03 am ad1c9bdddf
We note that
ROE = (Profit margin)*(Asset turnover)*(Equity multiplier) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)
For Yahoo (figures in thousands)
Net profit = 1,231,663
Sales (aka Revenue) = ...
Calculating ROE Using DuPont Method
Du Pont Method Effect on Equity
Please help with the following problems.
Using the Du Pont method, evaluate the effects of the following relationships for Moris Incorporated.
a. Moris Incorporated has a profit margin of 5 percent and its return on assets (investment) is 13.5 percent. What is its asset turnover ratio?
b. If Moris Incorporated has a debt-to-total-assets ratio of 60 percent, what will the firm's return on equity be?
c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 40 percent?View Full Posting Details