Use the DuPont system and the following data to find return on equity. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio 2.2 1.9 4.7% 34.0% Return on equity

Use the DuPont system and the following data to find return on equity. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio 2.2 1.9 4.7% 34.0% Return on equity

 

Solution

Return on equity = net profit margin * asset turnover *leverage ratio

= 4.7*1.9*2.2

=19.646% or 19.6%

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