Purchase Solution

Return on assets using Dupont Equation

Not what you're looking for?

Ask Custom Question

Please help with the following problems.

1) What would be the return on total assets of a firm if net income is $50,000 , total sales are $100,000 , and total assets are $175,000 ?

2) If the total assets turnover of firm is 1.5 , total assets are $500,000 , and net income is $50,000 , what is the margin ?

3) Assume a firm is devoloping, manufacturing, and selling a basic software package at $500 per copy. Raw materials and direct labor total $200 per copy. Fixed costs are $250,000. If the firm sells 5,000 units per year, what will be the operating profit?

Purchase this Solution
Solution Summary

This posting helps with finance question. The solution explains how to calculate the return on asset using the Dupont equation. It also gives the calculation of operating income.

Solution Preview

1) What would be the return on total assets of a firm if net income is $50,000 , total sales are $100,000 , and total assets are $175,000 ?

Return on Assets is the net income generated from the use of assets. It is calculated as
Return on Assets = Net Income/Total Assets= ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Return on investment

    ) times asset turnover (this is the DuPont Equation) Return on Investment = Net Income/Sales x Sales/Assets = ROS X Asset turnover The solution explains how to calculate the return on investment using the Dupont Equation.

  • Dupont Model and Return on Equity

    571065 Dupont Model and Return on Equity Compute the ROE for 2013 and 2014 using the DuPont model based on Brown's 2014 annual report information below.

  • Financial Accounting: Pacific Capital Bank

    There are two steps to use DuPont formula that are to examine the return on assets (ROA) and then examine the return on equity (ROE).

  • Using the extended DuPont equation to provide a summary

    . ============================================== The DuPont equation can be broken down into its three components: 1. Profit margin = Net Income / Total Sales 2. Return on assets = Net Income / Total Sales 3.

  • Return on Equity

    63993 Return on Equity Using the DuPont Equation An analyst applies the Du Pont system of financial analysis to the following data for a company: Leverage ratio (assets/equity) = 2.2 Total asset turnover = 2.0 Net profit margin = 5.5% Divident payout

  • Accrual Accounting and Financial Statements

    The DuPont equation is related to return on equity and adjusting entries are identified.

  • Du Pont analysis

    Can you explain how the ratio On Page 797 of the Brealey textbook, Brealey discusses how the Dupont System links Return on Assets (ROA) and Return on Equity (ROE) ratios with other financial ratios in useful ways.

  • Ratio Analysis

    293197 Dupont Analysis A firm has been experiencing low profitability in recent years. Per- form an analysis of the firm's financial position using the DuPont equation.

  • DuPont analysis

    Return on assets (using ending assets) 3. Total asset turnover (using ending assets) 4. DuPont analysis 5. Operating income margin 6. Return on operating assets (using ending assets) 7. Operating asset turnover (using ending assets) 8.

View More Related Solutions