can you please help solve A and B Solution Return on Equity = Net Profit Margin × Asset Turnover × Financial Leverage = .035* 1.5* 2.5= .1312 ie. 13.12 % Although the company is having a return on equity of around 13%, company is not using its assets well to generate revenues. It has a good financial leverage ratio, that is it has good number of assets generates from the equity .It can improve by using its total assets more effectively in generating sales. Return on Equity = Net Profit Margin × Asset Turnover × Financial Leverage.