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Sagot :
Answer:
3.83 %
Explanation:
Using the DuPont model formula :
Return on Equity = Return on Assets x Assets / Equity
where,
Return on Assets = Profit Margin x Total Assets Turnover
= (Net Income / Sales) x ( Sales / Total Assets)
= ( $9,011 / $35,000) x ($35,000 / 23,473 + 32,319)
= 2,57% x 0.627
= 1.61 %
Assets / Equity = ( 23,473 + 32,319) ÷ 23,473
= 2.38
therefore,
Return on Equity = 1.61 % x 2.38 = 3.83 %
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