Calculate the growth rate given the following: – Net profit margin 4% – Fixed asset turnover&

Calculate the growth rate given the following:

– Net profit margin 4%

– Fixed asset turnover 3.5

– Total asset turnover 2.2

– Total assets/equity 2.4

– Dividend payout ratio 45%

A. 9.5%

B. 11.6%

C. 18.5%

Expert Solution

Growth Rate, g = ROE * (1 - Dividend Payout Ratio)

Based on Du Pont relation,

ROE = Net profit margin * Total asset turnover * Total Assets/equity

ROE = 4% * 2.2 * 2.4 = 21.12%

g = 21.12% * (1 - 45%) = 11.6%

jeff jeffy answered 2 years ago

Calculate ROE given the following information: profit margin = 20%; total asset turnover = 0.64; equity...

Calculate ROE given the following information: profit margin = 20%; total asset turnover = 0.64; equity multiplier = 1.50.

A firm has a net profit margin of 4.5%, a total asset turnover of 0.72, and...

A firm has a net profit margin of 4.5%, a total asset turnover of 0.72, and a financial leverage multiplier of 1.43. 1. Calculate the firm's ROA and ROE. 2. What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?

Leadjet, an aerospace firm, reported a net profit margin of 3.0%; a total asset turnover of...

Leadjet, an aerospace firm, reported a net profit margin of 3.0%; a total asset turnover of 1.5; total assets of $36 billion and a book value of equity of $18 billion. Leadjet’s ROE is: a. 2.25% b. 8.37% c. 9.0% d. 6.0%

Assume company X has a net profit margin of 0.10 and a total asset turnover of...

Assume company X has a net profit margin of 0.10 and a total asset turnover of 2.30. If the firm had total liabilities of 1.304 million and total book equity of 0.870 million, what would its ROE be? 1. 0.109 2. 0.575 3. 0.100 4. 0.092

Lemmon Enterprises has a total asset turnover of 2.2 and a net profit margin of 7.1%....

Lemmon Enterprises has a total asset turnover of 2.2 and a net profit margin of 7.1%. If its equity multiplier is 1.6, what is the ROE for Lemmon Enterprises? (Round answer to 2 decimal places, e.g.12.25%.) ROE %

Figure It Out Corporation has a net profit margin of 8%, a total asset turnover of...

Figure It Out Corporation has a net profit margin of 8%, a total asset turnover of 2 times, total assets of $1 billion, and total equity of $500 million. What were the company’s sales and net profit?

Stroud Sporting Gear Inc. has a net profit margin of 6%, a total asset turnover of...

Stroud Sporting Gear Inc. has a net profit margin of 6%, a total asset turnover of 2.5, total assets of $250 million, and total equity of $125 million. What is the company’s return on equity?

The internal growth rate of Bestbuy is 30%. The profit margin is 20% and the asset...

The internal growth rate of Bestbuy is 30%. The profit margin is 20% and the asset turnover is 2. What is the payout ratio?

Return on Equity (ROE)= Sales Margin* Asset turnover* Gearing ratio ROE= Profit/equity Sales Margin= Profit/Sales Asset...

Return on Equity (ROE)= Sales Margin* Asset turnover* Gearing ratio ROE= Profit/equity Sales Margin= Profit/Sales Asset turnover= Sales/Assets Gearing Ratio= Assets/Equity This formula is important from strategy point of view as higher ROE is possible in a low profit margin business by increasing the asset turnover and by taking debt to increase the capital employed. This Question I need it to answer ---> "good very high level summary of the ratios in this DQ. Can you provide back to me...

Which of the following tends to fall over time? Net profit margin Total asset turnover Retention ratio or Leverage None of the above

Which of the following tends to fall over time?Net profit margin Total asset turnover Retention ratio or Leverage None of the above

Question