Use the DuPont system and the following data to find return on equity. Leverage ratio (assets/equity) .........
Question:
Use the DuPont system and the following data to find return on equity.
Leverage ratio (assets/equity) ......... 2.2
Total asset turnover ............. 2.0
Net profit margin ............. 5.5%
Dividend payout ratio ...........31.8%
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 60% (15 reviews)
Net profit margin Asset tur...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Accounting questions
-
Use the DuPont system to explain why a slower-than-average inventory turnover could cause a firm with an above-average net profit margin and an average degree of financial leverage to have a...
-
Use a stepwise regression procedure and the following data to develop a multiple regression model to predict y. Discuss the variables that enter at each step, commenting on their t values and on the...
-
California considers itself a "sanctuary" for undocumented immigrants because state officials, including law enforcement, are generally prohibited from cooperating with federal law enforcement agents...
-
An arm ABC lying in a horizontal plane and supported at A (see figure) is made of two identical solid steel bars AB and BC welded together at a right angle. Each bar is 20 in. long. Knowing that the...
-
How long should a traffic light stay yellow before turning red? One study suggests that for a car approaching a 40 ft wide intersection under normal driving conditions, the length of time, y, that a...
-
1. From an LMX theory point of view, how would you describe Jim's relationships with his employees at the district social security office? 2. Can you identify an in-group and an out-group? 3. Do you...
-
French and Schultz ("Water Use Efficiency of Wheat in a Mediterranean-type Environment, I The Relation between Yield, Water Use, and Climate," Australian Journal of Agricultural Research, 35, 743-64)...
-
You are given the following sample data for variables y and x : a. Develop a scatter plot for these data and describe what, if any, relationship exists. b. (1) Compute the correlation coefficient....
-
DEF Hedge Fund has long and short positions in its portfolio. Its objective is to have zero beta exposure in its portfolio. What type of strategy does it implement? Market neutral strategy Short bias...
-
E3.6 Find Vo in Fig. E3.6 using nodal analysis.
-
Firm A and firm B have the same ROA, yet firm As ROE is higher. How can you explain this?
-
Recently, Galaxy Corporation lowered its allowance for doubtful accounts by reducing bad debt expense from 2% of sales to 1% of sales. Ignoring taxes, what are the immediate effects on (a), Operating...
-
In an acquisition where 100% control is acquired, how would the land accounts of the parent and the land accounts of the subsidiary be reported on consolidated financial statements? Parent...
-
A beam sending neutrinos from CERN, Geneva-Switzerland, to the Gran Sasso Laboratories in Italy, near LAquila, was operational between 2006 and 2012. The distance as the crow flies (i.e., along the...
-
______ The risk of a type II error is directly controlled in a hypothesis test by establishing a specific significance level.
-
An automobile A travels on a straight road at the constant speed \(v_{A}=75 \mathrm{~km} / \mathrm{h}\). A second car B arrives at the speed \(v_{B}=130 \mathrm{~km} / \mathrm{h}\) and starts braking...
-
______ If the null hypothesis is false, increasing the level of significance () for a specified sample size will increase the probability of rejecting the null hypothesis.
-
_______________If two events are mutually exclusive, then P(A or B) = P(A) + P(B).
-
Develop a data model showing these five entities and their relationships. You are asked to participate in creating a logical data model for a physicians office.
-
A bar of a steel alloy that exhibits the stress-strain behavior shown in Figure 6.22 is subjected to a tensile load; the specimen is 375 mm (14.8 in.) long and has a square cross section 5.5 mm (0.22...
-
Suppose that during the production of a particular job, a machine malfunctions, destroying $2,750 of raw materials. How should the cost of these materials be handled? Should they be charged to the...
-
Consider the following alternatives: Use present worth analysis, an 8% interest rate, and an infinite analysis period. Which alternative should be selected in each of the two following situations? 1....
-
A problem often discussed in the engineering economy literature is the "oil-well pump problem"} Pump 1is a small pump; Pump 2 is a larger pump that costs more, will produce slightly more oil, and...
-
Three mutually exclusive alternatives are being studied. If the MARR is 12%, which alternative should be selected? Year A B -$20,000 -$20,000 -$20,000 +10,000 +10,000 +5,000 +10,000 2 +5,000 +5,000...
-
. For each of these relations, write down all functional dependencies. If there are no functional dependencies among attributes, you must state so. Do not write down trivial functional dependencies,...
-
and b = 3. 7.3a=2*b 8.(5-a)*b <7 9.b
-
What diameter of vertical tube would allow mayonnaise (= 1,200 kg/m3) to flow under its own weight?
Study smarter with the SolutionInn App