Henderson's Hardware has an ROA of 15%, a 4.5% profit margin, and an ROE of 20%....

Henderson's Hardware has an ROA of 15%, a 4.5% profit margin, and an ROE of 20%. What is its total assets turnover? Do not round intermediate calculations. Round your answer to two decimal places. What is its equity multiplier? Do not round intermediate calculations. Round your answer to two decimal places.

Expert Solution

ROA=profit margin*total assets turnover

15%=4.5%*total assets turnover

total assets turnover=15%/4.5%=3.33

ROE=profit margin*total assets turnover*equity multiplier

20%= ROA*equity multiplier

20%=15%*equity multiplier

equity multiplier=20%/15%=1.33

jeff jeffy answered 2 years ago

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