Question
Consider a retail firm with a net profit margin of 3.68 %, a total asset turnover of 1.71, total assets of $ 45.1 million, and
Consider a retail firm with a net profit margin of 3.68 %, a total asset turnover of 1.71, total assets of $ 45.1 million, and a book value of equity of $ 17.3 million. a. What is the firm's current ROE? b. If the firm increased its net profit margin to 4.32 %, what would be its ROE? c. If, in addition, the firm increased its revenues by 24 % (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?
1.- If, in addition, the firm increased its revenues by 24% (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?
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