11:59 AM Sat Nov 11 K STRATEGIC PROFIT MODEL EXAMPLE X 7. ... TI ious Return on Equity (ROE) 21.4% = Assume $6M in debt @ 12% retired with freed-up working capital Net Profit Equity File Details OPSM 3830 Section 001 - Operations Management (Fall 2023 1) = - Scenario 3: Raise ROA> 12% with Reduction in Assets - Gross Margin $ 45 Financial Return on Leverage Assets (ROA) 1.76 x 12.17% Total Assets Equity Net Profit Total Assets Net Profit Margin 5.36% Net Profit Net Sales X Asset Turnover 2.27 Net Total Assets Net profit $ 5.36 Sales $ 100 Sales $ 100 Total Assets UNT $ 44 Total Expenses $34.28 So, Pretax profits = 10.72M Income Taxes $ 5.36 Assumes 50% Marginal Tax Rate Current assets $ 19 + Fixed Assets $ 25 Sales $ 100 Cost of Goods Sold $ 55 G. BRINT RYAN COLLEGE OF BUSINESS Variable Expenses $ 15 + Fixed Expenses $19.28.72M Inventory $ 11 Accounts Receivable 6 + $ $ 2 14M 12M Other Current Assets 68% 19