If jPhone, Inc., has an equity multiplier of 1.40, total asset turnover of 1.58, and a profit margin of 7 percent. Required: What is the company's ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) ROE % Explanation: With the information given, we must use the Du Pont identity to calculate return on equity. Doing so, we find: ROE = (Profit margin)(Total asset turnover)(Equity multiplier) ROE = (.07)(1.58)(1.40) ROE = .1548, or 15.48%

If jPhone, Inc., has an equity multiplier of 1.40, total asset turnover of 1.58, and a profit margin of 7 percent.

Required:

What is the company's ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

ROE

%

Explanation:

With the information given, we must use the Du Pont identity to calculate return on equity. Doing so, we find:

ROE	=	(Profit margin)(Total asset turnover)(Equity multiplier)
ROE	=	(.07)(1.58)(1.40)
ROE	=	.1548, or 15.48%