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%