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Math Help - Please Help: ROI analysis using Dupont model

  1. #1
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    Smile Please Help: ROI analysis using Dupont model

    I'm not sure how to respond to the problem.

    A firm has RIO at 12.6 % , average total assets of $1,730,159, and turnover of 1.4. Calculate te firm sales,margin,and net income to the nearest whole number.

    Should I divided the percentage to the assets or multiply using the Dupont model?
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  2. #2
    Junior Member
    Joined
    Jun 2009
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    Use ROI =  \frac{net\ income}{Assets} \ =\ \frac{net\ income}{1,730,159} = 0.126 to get Net Income.

    Then use Turnover =  \frac{Sales}{Assets}\ =\ \frac{Sales}{1,730,159} = 1.4 to get Sales.

    With Net Inc and Sales in hand, you've got 2/3 of your needed answers, plus the two ingredients needed to compute Margin.
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