Question

Rogers, Incorporated, has an equity multiplier of 1.44, total asset turnover of 1.73, and a profit margin of 11 percent. What is the company's return on equity (ROE)?

Answer 1

The company's return on equity (ROE) is approximately 27.01%.

Step-by-step explanation:

To calculate the return on equity (ROE), we need to use the formula:

ROE = Profit Margin x Total Asset Turnover x Equity Multiplier

Given that the profit margin is 11%, the total asset turnover is 1.73, and the equity multiplier is 1.44, we can substitute these values into the formula:

ROE = 0.11 x 1.73 x 1.44 = 0.2701

To express this as a percentage, we multiply by 100:

ROE = 0.2701 x 100 = 27.01%

Therefore, the company's return on equity (ROE) is approximately 27.01%.