Answered: Doublewide Dealers has a ROA of 12%, a…

Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its total assets turnover? What is its equity multiplier?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 6P

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Question

Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its
total assets turnover? What is its equity multiplier?

Expert Solution

Step 1

Given

ROA = 12%

Profit margin = 3%

Return on equity = 15.50%

Return on Assets (ROA) = Profit Margin * Total Assets Turnover

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