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What is its profit margin

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Reference no: EM132832235

Problem - A company has $20 billion of sales and $1 billion of net income. Its total assets are $10 billion. The company's total assets equal total invested capital, and its capital consists of half debt and half common equity. The firm's interest rate is 5%, and its tax rate is 40%.

Required -

1. What is its profit margin?

2. What is its ROA?

3. What is its ROE?

4. What is its ROIC?

5. Would this firm's ROA increase if it used less leverage? (The size of the firm does not change.)

Reference no: EM132832235

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