A Company Has Return on Assets of -8

question 41

Multiple Choice

A company has return on assets of -8%. Return on sales are -6%. The leverage ratio is 2.0. Following DuPont analysis, what is return on equity?

• A)-6%
• B)-8%
• C)-16%
• D)-28%

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Definitions:

Codify

The process of collecting and systematizing laws, rules, or regulations into a code or coherent system.

Mining Partner

An individual or entity that enters into a partnership with others to engage in the exploration or extraction of minerals.

Transferable Interest

The portion of a member's ownership in an LLC or partnership that can be transferred or sold.

Partnership Account

A financial account held in the name of a partnership for the purpose of managing the partnership's funds.