What is a company's return on equity?
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A company sells its product on credit, it has a profit margin of 4 percent, days sales o/s equal to 60 days, receivables of $150,000 total assets of $3,000,000 and a debt ratio of .64 What is the Return on Equity (ROE)?
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Days sales o/s = Receivables/Sales per day
60 = 150,000/Sales per day
Sales per day = 2,500
Assuming a 360-day year, the total sales will be equal
2,500 x 360 = ...
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