Question: Data from the financial statements of Eclectic
Data from the financial statements of Eclectic Candle Company included the following:
The company had no preferred stock.
Requirements:
1. Calculate the following ratios:
a. Net profit margin
b. Asset turnover ratio
c. Leverage ratio
d. Return on assets (ROA)
e. Return on equity (ROE)
2. Which is higher, ROA or ROE? Does this make sense for stockholders? Why or why not?
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