Question of the Week
a) An equity turnover of 1.2.
b) A profit margin of 21.33%.
c) A return on equity of 14.3%.
d) A debt-to-asset ratio of 0.62.
The correct answer is: b)
Return on Assets = NI/Sales = Sales/Assets x NI/Sales
.16 = 0.75 x (NI/Sales)
Therefore, NI/Sales = .16/.75 = 21.33%