A firm has a return on equity of 17 percent. the total asset turnover is 2.5 and the profit margin is 9 percent. the total equity is $5,800. 986 is the net income.
Given that ROE = 17%
we know that using the Dupont equation ROE =
=(Net income/sales)*(asset/Equity)*(sales/Total asset)
=9%*(asset/equity)*2.5= 17%
Therefore
Asset/equity = 0.7556
Asset = =5800*0.7556
Asset = 4,382
Sales = 10,956
=2.5*4382
Net income = 986
10956*9%
Therefore answer = 986.
Profit margin is a profitability indicator that indicates whether a business is profitable. Shows what percentage of the company's sales have been converted into profit, or how many cents per dollar are generated per sale. Profit margins allow analysts and investors to determine the financial health and well-being of a particular company.
Learn more about profit margin at
https://brainly.com/question/10218300
#SPJ4
