In this chapter, we discussed the ROE profit driver (or DuPont) model. Using that framework, find the

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In this chapter, we discussed the ROE profit driver (or DuPont) model. Using that framework, find the missing amount in each case below:

Case 1: ROE is 10 percent, profit is \(\$ 300,000\); asset turnover is 5 , and net sales are \(\$ 1,000,000\). What is the amount of average shareholders' equity?

Case 2: Profit is \(\$ 440,000\); net sales are \(\$ 8,000,000\); average shareholders' equity is \(\$ 2,000,000\); ROE is 22 percent and asset turnover is 8 . What is the amount of average total assets?

Case 3: ROE is 15 percent; net profit margin is 10 percent; asset turnover is 5 ; and average total assets are \(\$ 1,000,000\). What is the amount of average shareholders' equity?
Case 4: Profit is \(\$ 500,000\); ROE is 15 percent; asset turnover is 5 ; net sales are \(\$ 1,000,000\); and financial leverage is 2 . What is the amount of average total assets?

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Financial Accounting

ISBN: 9780070001497

4th Canadian Edition

Authors: Patricia A. Libby, Daniel Short, George Kanaan, Maureen Libby Gowing, Robert Libby

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