CFAI Moch Afternoon Q58 - Asset Turnover calc.. percentage, statements, industry

spartanag07

I was trying to rule these statements out 1 by 1…
Statement A - I was able to rule out because you use DDM to get “g” and “r”. First you calculate “g” as RR*ROE=15.82% then you have to calculate “r” (this is dirty IMHO)… and you get r = .171
ROE = ROA * Leverage so Leverage = ROE/ROA. SMGI leverage is 1.73 industry avg is 1.454 so statement 1 is incorrect.
Statement B - I couldn’t figure out.
Statement C - I calculated and got the PVGO as 19.17 and then as a percentage of the total estimated future price 19.17 / 35.78 = .535
Through process of elimination I was able to answer correctly, but I’m confused b/c I’ve never seen Asset turnover = ROA / NPM. Can anyone explain?

liquidity

(NPM*Asset Turnover)/NPM = Asset Turnover

luckygiftvn

Just write out what each three is and its a simple manipulation.
Sales over assets equals ( NI over assets ) divided by (NI over Sales)
Formula gets solved to equal asset turnover on both sides