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

%

Expert Solution

Return on equity=(return on assets X equity multiplier)

ROA=(net profit margin X total asset turnover)

=(2.2*7.1%)=15.62%

ROE= (1.6*15.62%)= 24.992%

jeff jeffy answered 2 years ago

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