Assume BDS Acquired Its Main Supplier,ABC

question 68

Multiple Choice

Assume BDS acquired its main supplier,ABC.As a result of the acquisition,BDS finds that its profit margin increased but its ROA remained constant.A decrease in which one of these ratios is most apt to be the reason why the ROA did not increase with the increase in the profit margin?

• A) Leverage ratio
• B) Market-to-book ratio
• C) Asset turnover
• D) Debt burden

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