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Using the Dupont formula for Company A, Return on Equity (ROE) is 78.80% *The formula used forROE=Profit Margin*Asset Turnover*Equity Multiplier ROE = 15.52%*2.18*2.33 ROE =
- Using the Dupont formula for Company A, Return on Equity (ROE) is 78.80%
*The formula used forROE=Profit Margin*Asset Turnover*Equity Multiplier
ROE = 15.52%*2.18*2.33
ROE = 78.80%
Using the above formula, Explain how working capital policy of a large textile Company A would affect the expected ROE.
Note: Questions on assessment of inventory policy, liquidity policy, credit policy, etc can be asked.
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