Which of the following will allow your firm to achieve its targeted 16% ROA with an asset turnover of 2.5?
A) A leverage ratio of .0667
B) A P/E ratio of 14
C) A return on equity of 25%
D) An operating profit margin of 6.4%

Question

Quizplus · Accepted Answer

ROA = Operating profit margin × Asset turnover0.16 = Operating profit margin × 2.50Operating profit margin = 0.064, or 6.4%

Which of the Following Will Allow Your Firm to Achieve