Question: For the following changes in ratios, identify the effects on ROE. Assume that each change is independent of each other, and that all other factors,
For the following changes in ratios, identify the effects on ROE. Assume that each change is independent of each other, and that all other factors, unless otherwise specified, remain constant Decreases ROE Increases ROE Days sales in receivables Inventory turnover increased from 3.2 times to decreased from 30 days to 29 days 3.7 times Fixed asset turnover decreased to .90 from .95 times fit margin increased rom 3.2% to 3.9% Net working capital (NWCet income divided by increased from $389 to $459 (sales remained total assets decreased from 10.5% to 10.296 constant) Net income decreases Total assets divided by from $45 to $33 (sales equity increased from 1.4 remained constant) to 1.9
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