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.