Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation.
a. Butters Corporation has a profit margin of 4.5 percent and its return on assets (investment) is 10 percent. What is its assets turnover? (Round your answer to 2 decimal places.)
Assets Turnover Ratio= ______ times
b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm’s return on equity be? (Input your answer as a percent rounded to 2 decimal places.)
Return on Equity= ____%
c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.)
Return on equity= ___________ &