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Eduncle posted an MCQ
March 02, 2020 • 23:30 pm 0 points
  • UGC NET
  • Management

The Total Asset Turnover Ration and Total Assets to Networth Ratio of Kuber Ltd. are 1.75 and 2, respectively. If the Net Profit Margin of this company is 8%. What is the Return on Equity (ROE)?

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    Eduncle Best Answer

    As per On-Post Analysis
    ROE (Return on Equity) = Net Profit Margin × Asset Turnover Ratio
    × Assets to Turnover Ratio
    = 8% × 2 × 1.75
    = 28%
    ROE = 0.28

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