Rogers Radiators has net income of $48,200, sales of $947,100, a capital intensity ratio of. 87, and an equity multiplier of 1.53. What is the return on equity

ROE = 6%

Explanation:

Return on equity is the measure of a business profitability as related the owner's equity. It shows how well a company is making profits on shareholder funds.

Return on investment (ROE) = Profit Margin * Capital intensity ratio * Equity multiplier

To calculate the profit margin

Profit margin = Net income/Gross Income

Profit margin = 42,800/947,100

Profit margin = 0.045

Substitute in formula for ROE

ROE = 0.045 * 0.87 * 1.53

ROE = 0.06 = 6%