[CFA level 1模拟真题]Version 1 Questions－Q26 face, class, company, companies, achieved

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Q26: if both companies achieved a return on equity of 15 percent for the period, the company most likely to have the higher net profit margin and higher financial leverage multiplier, respectively, is:

Higher net profit margin                   higher financial leverage multiplier

A.     butler                                    butler

B.     butler                                    Annandale

C.     Annandale                                 butler

D.     Annandale                                 annandale

 

答案和详解如下：

Q26.A     Study Session 8-38.d

The Dupont system can be used to break down ROE into three components: Profit margin, total asses turnover, and financial leverage multiplier.

The total asset turnover is 300/140=2.14 for Annandale and 120/70=1,71 for butler. The financial leverage is 140/100=1.4 for Annandale and 70/45=1.56 for butler.

For Annandale, 15%=(net profit margin)(1.71)(1.56), so the net profit margin is 5.6%.

(The net profit margin could also be computed by computing net income for each company. For Annandale, 15%=net income/100,so net income is $15.15/300=5.0%

For Butler 15%=net income /45. so net income is 6.75 .6.75/120=5.6%)

 

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