Share
Explore BrainMass

Return on Equity and Net income

1. A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are$100 million and it has total assets of $50 million. What is its ROE?

2. Ebersoll mining has $6 million in sales; its ROE is 12%; and its total assetsturnover is 3.2x. The company is 50% equity financed. What is its net income?

Solution Preview

Solution 1

Equity Multiplier = Total Asset/Total Stockholder Equity;Net Income = Profit Margin * ...

Solution Summary

The solution computes ROE and Net income

$2.19