28 All the companies listed in the table below display a leverage multiplier greater than one. Net Profit Total Asset Margin Turnover 1.5 Leverage Return on Multiplier Equity 2.5 75.0% 2.0 25.0% 0.83 15.0% 3.0 Company 1 20.00% Company 2 15.00% Company 3 10.00% 0.5 What does this imply? 100% The leverage multiplier for each company actively contributes to the return on equity to shareholders and can help expand the operations and arowth of the firm. " 130 AM = cena Tasks 0.83 15.0% / CUTIVally2 3.0 05 Company 3 10.00% What does this imply The leverage multiplier for each company actively contributes to the return on equity to shareholders and can help expand the operations and growth of the firm A leverage multiplier greater than one indicates a risky business because there are more liabilities than equity A leverage multiplier is always greater than one, so this does not indicate anything unusual about these companies. The leverage multiplier for each company actively controutes to the return on equity to shareholders, but a leverage multiplier closer to one would be ideal 130 AM 5/9/2009