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21. The Merriam Company has determined that its return on equity is 25 percent. Management is interested in the various components that went into
21. The Merriam Company has determined that its return on equity is 25 percent. Management is interested in the various components that went into this calculation. You are given the following information: total debt/total assets = 0.50 and total assets turnover 2.5. What is the profit margin? $1,000 22. The Amer Company has the following characteristics: What is Amer's ROE and ROA? Sales Basic Earning Power (EBIT/TA) ratio: 15% Total assets $2,000 Tax rate 40% Total debt/Total assets 50% Interest rate on total debt 5%
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