Question

In: Finance

Wood Recovery has sales of $397,000, total assets of $225,000, and total debt of $101,700 million.

Wood Recovery has sales of $397,000, total assets of $225,000, and total debt of $101,700 million. The net profit margin is 6.2 percent. What is the return on equity? Multiple Choice

19.96%

5.99%

32.20%

1.32%

Solutions

Expert Solution

 ROE is 19.96%   
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 Statement showing Computations   
 Particulars   Amount 
 Assets                    225,000.00
 Debt                    101,700.00
 Equity =225,000 - 101,700                    123,300.00
   
 Sales                    397,000.00
 Profit =397,000*6.2%                      24,614.00
   
 Return on equity =24,614/123,300  19.96%

 

The right option is 19.96%.

The right option is 19.96%.

Junaid answered 2 years ago
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