Companies HD and LD Are Both Profitable, and They Have

question 62

Multiple Choice

Companies HD and LD are both profitable, and they have the same total assets (TA) , Sales (S) , return on assets (ROA) , and profit margin (PM) . However, Company HD has the higher debt ratio. Which of the following statements is CORRECT?

• A) Company HD has a lower total assets turnover than Company LD.
• B) Company HD has a lower equity multiplier than Company LD.
• C) Company HD has a higher fixed assets turnover than Company LD.
• D) Company HD has a higher ROE than Company LD.
• E) Company HD has a lower operating income (EBIT) than Company LD.

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