You Observe That a Firm's ROE Has Increased from the Previous

question 41

Multiple Choice

You observe that a firm's ROE has increased from the previous year, but both its profit margin and equity multiplier are below the previous year's levels. Which of the following statements is CORRECT?

• A) Its total assets turnover must be higher than the previous year.
• B) Its return on assets must be lower than the previous year.
• C) Its TIE ratio must be higher than the previous year.
• D) Its total assets turnover must be lower than the previous year.

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Definitions:

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