What would the firms return on equity be

Assignment Help Financial Management

Reference no: EM131504870

Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation.

a. Butters Corporation has a profit margin of 4.5 percent and its return on assets (investment) is 15 percent. What is its assets turnover? (Round your answer to 2 decimal places.)

b. If the Butters Corporation has a debt-to-total-assets ratio of 45.00 percent, what would the firm’s return on equity be? (Input your answer as a percent rounded to 2 decimal places.)

c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 40.00 percent? (Input your answer as a percent rounded to 2 decimal places.)

Reference no: EM131504870

Questions Cloud

What is the operating cash flow for this project : The project is estimated to generate $2,040,000 in annual sales and annual costs of $735,000. what is the Operating Cash Flow for this project?

Explain how you would establish credibility : Describe the product or service, including its main characteristics. Why do you believe this product is worthwhile?

Two investments in her portfolio : If these are the only two investments in her portfolio, what is her portfolio's beta?

What is the mirror radius of curvature r : If the image height is m times the person's height, what is the mirror's radius of curvature R?

What would the firms return on equity be : If the Butters Corporation has a debt-to-total-assets ratio of 45.00 percent, what would the firm’s return on equity be?

Describes the site to your prospective client : Create a narrative that describes the site to your prospective client.Create a storyboard diagram depicting the layout of your Website.

Background of real-time b-mode ultrasound imaging : What is some history and background of Real-Time B-mode ultrasound imaging? Citing peer reviewed journal articles.

Estimate a growth rate for your firms earnings per share : Estimate a growth rate for your firm's Dividends per Share. Estimate a growth rate for your firm's Earnings per Share (EPS).

Shock between two points on the same arm : Why is an electric shock between your two hands more dangerous than a shock between two points on the same arm?

User Account

All Pages