Ask Experts Questions for FREE Help !
Ask
    Harleygirl35's Avatar
    Harleygirl35 Posts: 3, Reputation: 1
    New Member
     
    #1

    Oct 14, 2009, 07:18 AM
    DuPONT & net income
    Trying to figure out what the gross profit or cost production is for this problem... unsure on how to solve it? :confused:

    Ebersoll Mining:
    Has $6 million in sales
    ROE is 12%
    Total assets turnover is 3.2x
    The company is 50% equity financed
    What is the net income?


    Net Income = Sales - Gross profit; Gross Profit - Cost of Production = Net Income

    NI = 6.0 -
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
     
    #2

    Oct 14, 2009, 02:18 PM
    First, use the given sales amount and the asset turnover ratio to get the total assets.



    Then, per the given debt-to-equity info, Equity is half the assets.

    Finally, you can determine Net Income using the Assets amount, and the given ROE.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Do those income count among my taxable income?-dual status [ 4 Answers ]

Please help, I am on dual status for 2008 tax purpose. I was on H1B and left US in April, 2008. My questions are: During my non-resident period of 2008, I only received interests from US saving account and dividends from US brokerage account(some of dividends distributed in my IRA and mutual...

Dupont Model [ 1 Answers ]

A store has 4,000,000 in yearly sales. The firm earns 3.5% on each dollar of sales and turnsits assets 2.5 times per year it has $100,000 in current liabilities and $300,000 in long term liabilities. What is its return on stockholder's equity

Wealth & Income Dispersion, Income Mobility, and Economic Injustice [ 20 Answers ]

There's a lot of trash being talked here and elsewhere these days about how income and wealth are distributed among the US populace, how these distributions are changing, what is causing these changes, and whether those changes are benign or malevolent. Beyond that lie the questions of whether,...


View more questions Search