Determining firm-s profit margin and equity multiplier


1) ABC Corp has total assets of= $4,744,288, total debt of= $2,912,000, and net sales of= $7,212,465. Their net profit margin for year is 18%. Compute ABC's ROA?

 

a. 25.6%

 

b. 18%

 

c. 27.4%

 

d. None of the above

 

2) GenTech Pharma has reported given information:

 

Sales/Total assets = 2.89;             ROA = 10.74%; ROE = 20.36%

 

Determine the firm's profit margin and equity multiplier?

 

a. 7.1%; 0.53

 

b. 7.1%; 1.90

 

c. 3.7%; 0.53

 

d. 3.7%; 1.90

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Accounting Basics: Determining firm-s profit margin and equity multiplier
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