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I truly need help on Profitability Measures. I would appreciate your expert help in answering these questions. Thanks so much 6. Profitability measures Aa Aa
I truly need help on Profitability Measures.
I would appreciate your expert help in answering these questions.
Thanks so much
6. Profitability measures Aa Aa Summaries of the financial statements for Wilson Electronics are shown below: Current assets Net fixed assets Total assets 3,000,000 12,000,000 15,000,000 Total debt Total equity Total debt & equity 6,000,000 9,000,000 15,000,000 Wilson generated $1,100,000 of net income on $31,000,000 of sales. Perform a Du Pont analysis of Wilson's return on equity (ROE) below: ROE = Profit Margin x Total Asset Turnover Ratio x Equity Multiplier Wilson's president is happy with most areas of the firm's operations, but she thinks the firm's asset management can be improved. Specifically, she points out that the average total asset turnover ratio in the industry is 3.00 times However, she doesn't want Wilson to be "average," so she wants it to strive for a total asset turnover ratio of 4.00 times, which would be in line with the industry leaders. If Wilson succeeds in increasing its total asset turnover ratio without harming its other numbers, what will Wilson's new ROE be? Assume that this goal will be achieved without affecting other ratios 30.63% 31.58% 23.66% 25.00% 29.63% OStep by Step Solution
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