Manag., December-2019 – Q54

54The Total Asset Turnover Ratio 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)?

Option : D
Explanation : 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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