Financial leverage-income tax rate-roe

Reference no: EM131016771

Using the following financial statement data, calculate the following ratios for 2013: Operating margin, asset turnover, interest burden, financial leverage, income tax rate, ROE using the dupont formula.

Income statment data	2005	2013
Revenues	542	979
Operating income	38	76
Depreciation and Amortization	3	9
Interst expense	3	0
Pretax income	32	67
Income taxes	4	27
Net income after tax	28	40
Balance Sheet
Fixed assets	41	70
Total assets	648	898
working capital	123	157
Total debt	126	60
total shareholders equity	399	681

Current stock price is $19.23

Discuss how interest burden and asset turnover have impacted ROE from 2005 to 2013.

Reference no: EM131016771

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