fm4 18 - ROE 08 = Net Income/Common Equity =...

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Mini Case: 4 - 18 e. Calculate the 2008 profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios? Answer: Profit Margin 08 = Net Income/Sales = $253,584/$7,035,600 = 3.6%. Basic Earning Power 08 = EBIT/Total Assets = $502,640/$3,516,952 = 14.3%. ROA 08 = Net Income/Total Assets = $253,584/$3,516,952 = 7.2%.
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Unformatted text preview: ROE 08 = Net Income/Common Equity = $253,584/$1,977,152 = 12.8%. The firm’s profit margin is above 2006 and 2007 levels and is at the industry average. The basic earning power, ROA, and ROE ratios are above both 2006 and 2007 levels, but below the industry average due to poor asset utilization....
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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