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:

Cash

A form of currency that includes coins and currency notes, used as a medium of exchange.

Accounts Payable

A liability on a company's balance sheet representing the amounts due to suppliers by the business.

Cash

Money in the form of coins or notes that is readily available for transactions.

Initial Investments

The initial amount of money used to purchase an asset or start a business.