Using the DuPont method, evaluate the effects of the following relationships for the Lollar Corporation.

a.Lollar Corporation has a profit margin of 5.0 percent and its ROA (investment) is 16.25 percent. What is its asset turnover?(Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Asset turnover ratio3.25

3.25 Correct

x

b.If Lollar Corporation has a debt-to-total-assets ratio of 60 percent, what would the firm's ROE be?(Do not round intermediate calculations.Roundthe finalanswer to 2 decimal places.)

Return on equity27.08

27.08 Incorrect

%

c.What would be the ROE, if the debt-to-total-assets ratio decreased to 50 percent?(Do not round intermediate calculations.Roundthe finalanswer to 2 decimal places.)

Return on equity32.50

32.50 Correct

%