A firm has a tax burden ratio of 0.75, a leverage ratio of 1.5, an interest burden of 0.7, and a return on sales of 10%. The firm generates $2 in sales per dollar of assets. What is the firm\'s ROE? Solution Return on equity = Net profit margin x asset turnover x equity multiplier = (10% x .70 x .75) x 2 x (1+1.5) = 5.25% x 3 =15.75%.