Determining the level of profitability


Carter, Inc., a manufacturer of electrical supplies, has an ROE of 23.1 percent, a profit margin of 4.9 percent, and a total asset turnover ratio of 2.6 times. Its peer group also has an ROE of 23.1 percent but has outperformed Carter with a profit margin of 5.3 percent and a total assets turnover ratio of 3.0 times. Explain how Carter managed to achieve the same level of profitability as reflected by the ROE.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Determining the level of profitability
Reference No:- TGS0670597

Now Priced at $5 (50% Discount)

Recommended (95%)

Rated (4.7/5)