This year andrews achieved an roe of 4.7%. suppose management takes measures that decrease asset turnover (sales/total assets) next year. assuming sales, profits, and financial leverage remain the same, what effect would you expect this action to have on andrews's roe?

ROE will decreases

Explanation:

We know that ROE is given by

ROE = Profit Margin (Profit/Sales) ×Total Asset Turnover (Sales/Assets) ×Equity Multiplier (Assets/Equity)

It is given that total Asset Turnover (Sales/Assets) decline keeping other things constant

As the ROE is directly related to the total asset turnover so ROE will also decreases

i honestly speaking this is too long

me no say