Question

if rogers, incorporated, has an equity multiplier of 1.56, total asset turnover of 1.70, and a profit margin of 6.6 percent, what is its roe?

Answer 1

Rogers, Incorporated has a Return on Equity (ROE) of 17.556%, calculated using the DuPont Identity by multiplying the profit margin of 6.6%, the total asset turnover of 1.70, and the equity multiplier of 1.56.

Step-by-step explanation:

In order to calculate the Return on Equity (ROE) for Rogers, Incorporated, we need to use the DuPont Identity, which breaks ROE down into three components: the equity multiplier, the total asset turnover, and the profit margin.

The equation for ROE based on the DuPont model is:

ROE = Profit Margin x Total Asset Turnover x Equity Multiplier

Given that Rogers, Incorporated has a profit margin of 6.6%, a total asset turnover of 1.70, and an equity multiplier of 1.56, we can calculate its ROE as follows:

ROE = 0.066 x 1.70 x 1.56

ROE = 0.17556, or 17.556%

Therefore, the ROE for Rogers, Incorporated is 17.556%.