Question

Rogers, Incorporated, has an equity multiplier of 1.42, total asset turnover of 1.71, and a profit margin of 9 percent. What is the company's return on equity (ROE)?

Answer 1

The company's return on equity (ROE) is 21.76%.

Step-by-step explanation:

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

ROE = Profit Margin * Total Asset Turnover * Equity Multiplier

Given that the profit margin is 9 percent, the total asset turnover is 1.71, and the equity multiplier is 1.42:

ROE = 0.09 * 1.71 * 1.42 = 0.2176, or 21.76%

Therefore, the company's return on equity (ROE) is 21.76%.