Gardial & Son has an ROA of 12%, a 5% profit margin, and a return on...

Gardial & Son has an ROA of 12%, a 5% profit margin, and a return on equity equal to 20%.

What is the company's total assets turnover?

What is the firm's equity multiplier?

(Please show steps and you may use a financial calculator formula as well).

Solutions

Expert Solution

a. Total asset turnover = ROA / Profit margin = 0.12 / 0.05 = 2.4 times

b. Equity multiplier = ROE / ROA = 0.20 / 0.12 = 1.67 times

jeff jeffy answered 1 year ago

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