ROE and ROA
Not what you're looking for?
2 SEPARATE SCENARIOS:
Keller Cosmetics maintains a profit margin of 4 percent and a sales-to-assets ratio of 3. What would its return on assets be (ROA) and how would you arrive at this answer?
If its debt-equity ratio is 1.0, its interest payments and taxes are each $10,000, and EBIT is $40,000, what is the return on equity and how would you arrive at this answer?
On average, it takes Keller Cosmetics customers 60 days to pay their bills. If Keller Cosmetics has annual sales of $500 million, what is the average value of unpaid bills (how would you compute this in detail)?
Purchase this Solution
Solution Summary
The solution explains how to calculate the ROA and ROE
Solution Preview
Keller Cosmetics maintains a profit margin of 4 percent and a sales-to-assets ratio of 3. What would its return on assets be (ROA) and how would you arrive at this answer?
Profit Margin = Net Income/Sales
Return on Assets = Net Income /Assets = Net Income/Sales X Sales/Assets
Give that Net Income/Sales is 4% and Sales to Assets is 3
Return on Assets = 4% X 3 = 12%
If its debt-equity ratio is 1.0, its interest payments and taxes are each ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.