Answer:
Total assets turnover = 5.5
Equity multiplier = 1.55
Explanation:
The return on assets (ROA = 11%) is defined as the profit margin (2%) multiplied by the total assets turnover (TAT):
[tex]0.11=0.02*TAT\\TAT = 5.5[/tex]
The return on equity (ROE = 17%) is defined as the product of the return on assets (ROA = 11%) by the equity multiplier (EM):
[tex]0.17=0.11*EM\\EM=1.55[/tex]
The company's total assets turnover is 5.5
The firm's equity multiplier is 1.55
