If a Firm Has an After-Tax Profit Margin of 8

question 50

Short Answer

If a firm has an after-tax profit margin of 8%, an asset turnover of 3 times, and no debt, what will be its return on assets and return on equity?

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Definitions:

Debit And Credit

Fundamental concepts in accounting that represent the increase or decrease in an account balance; debits increase asset or expense accounts, while credits increase liability, equity, or revenue accounts.

Chart Of Accounts

An organized list of all accounts in a company's financial system, which is used to classify transactions.

Financial Statement Order

The sequence in which the key financial documents are prepared, typically including the income statement, balance sheet, statement of cash flows, and statement of retained earnings.

Debits And Credits

Fundamental accounting concepts that are used in double-entry bookkeeping, where debits must equal credits in every transaction.