Last year Vaughn Corp.had sales of $315,000 and a net income of $17,832,and its year-end assets were $210,000.The firm's total-debt-to-total-assets ratio was 42.5%.Based on the Du Pont equation,what was Vaughn's ROE?
A)14.77%
B)15.51%
C)16.28%
D)17.10%

Question

Quizplus · Accepted Answer

ROE = Net Income / Sales * Sales / Assets * Assets / Equity= 17,832 / 315,000 * 315,000 / 210,000 * 210,000 / (210,000 * (1 - 0.425))= 14.77%

Last Year Vaughn Corp