A firm has a profit margin of 21 percent on sales of 2000000

A firm has a profit margin of 21 percent on sales of $20,000,000. If the firm has debt of S7,500,000, total assets of $24,000,000, and an after-tax interest cost on total debt of 5 percent, what is the firms ROA? Express your answer in percentage (without the % sign) and round it to two decimal places, 15.67, for exapmle.

Solution


ROA = Profit margin x Sales / Total Assets

ROA = 21% x 20,000,000 / 24,000,000

ROA = 17.50 Percentage

 A firm has a profit margin of 21 percent on sales of $20,000,000. If the firm has debt of S7,500,000, total assets of $24,000,000, and an after-tax interest co

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