Thanks for the help. I’m trying to work out my confusion so I’ll likely be posting throughout the coming week. This relates to Dupont Analysis: Givens: ROE = 15% Net Sales = 120 Total Assets = 70 Total Liabilities = 25 Here’s what I understand: Financial Leverage = Total Assets/Total Equity = 70/(70-25) = 1.56 ROA = ROE/Financial Leverage = 15/1.56 = 9.62 ROA = NPM(TAT) TAT = Sales/Total Assets Question: Why would I have 170 as total assets in the TAT denominator? Thanks in advance!
NM. It’s an error on the online mock exam answer. Question #60. Evening exam.