In this chapter, we discussed the DuPont model. Using that framework, find the missing amount in each
Question:
Case 1: ROE is 10 percent, net earnings are $ 300,000, total asset turnover ratio is 5, and net sales are $ 1,000,000. What is the amount of average shareholders’ equity?
Case 2: Net earnings are $ 440,000, net sales are $ 8,000,000, average shareholders’ equity is $ 2,000,000, ROE is 22 percent, and total asset turnover ratio is 8. What is the amount of average total assets?
Case 3: ROE is 15 percent, net profit margin ratio is 10 percent, total asset turnover ratio is 5, and average total assets are $ 1,000,000. What is the amount of average shareholders’ equity?
Case 4: Net earnings are $ 150,000, ROE is 15 percent, total asset turnover ratio is 5, net sales are $ 1,000,000, and financial leverage is 2. What is the amount of average total assets? Asset Turnover
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.
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Related Book For 
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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