I do not want you to answer this for me, I just need some sort of guide. I need to find the net income but was only given the following information:
ROI=12%
Sales=48 million
Average Asset Turnover=2.4
Average Owners Equity=12 million

Thanks for any help that could be given.:confused:

This is a matter of applying your math skills to work problems backwards. (i.e. if you're good at algebra, then you're in luck.) Go find your DuPont equation for ROI. Write out the components of that equation. Write it out both as turnover x profit margin, and write out those two equations separately also. So that you have 3 total equations.

Any problems like this with missing numbers can be solved this way. Fill in what you already know, including answers. That's what makes it look like an algebra problem, cause you'll have an answer, but a number in the equation will be missing. For instance, you have the asset turnover, so you have the answer, but not all the numbers that go in the equation, so you have missing numbers.

Look through what you have, find something where you have 2 of the 3 numbers, work it backwards to find the missing number. Now that you that, insert that any place else it exists in the other two equations. You should then be able to solve for yet another number, etc.

Give this a try. If you need further help, come back with whatever you've got worked out.