A Firm Has a (Net Profit/pretax Profit) Ratio of 0

question 16

Multiple Choice

A firm has a (net profit/pretax profit) ratio of 0.6, a leverage ratio of 2, a (pretax profit/EBIT) of 0.6, an asset turnover ratio of 2.5, a current ratio of 1.5, and a return on sales ratio of 4%. The firm's ROE is

• A) 4.2%.
• B) 5.2%.
• C) 6.2%.
• D) 7.2%.
• E) None of the options are correct.

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Definitions:

Standard Deviation

A measure of the dispersion or variability within a set of data points, showing how much variation exists from the average.

Germinate

The process by which a plant grows from a seed or similar structure, culminating in the emergence of a new seedling.

Poisson Model

A statistical model used to predict the probability of a given number of events occurring within a fixed interval of time or space.

Probability

A measure of the likelihood of an event occurring, ranging from 0 (impossibility) to 1 (certainty).