You Observe That a Firm's ROE Is Above the Industry

question 103

Multiple Choice

You observe that a firm's ROE is above the industry average,but its profit margin and debt ratio are both below the industry average.Which of the following statements is correct?

• A)Its total assets turnover must be above the industry average.
• B)Its return on assets must equal the industry average.
• C)Its TIE ratio must be below the industry average.
• D)Its total assets turnover must be below the industry average.

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Definitions:

Married Couple

A legal status for two individuals who are united in marriage, recognized by law, affecting tax and legal situations.

Itemizes

The process of listing tax-deductible expenses on a tax return individually, rather than taking the standard deduction.

Separate Returns

Tax returns filed by married individuals choosing not to file a joint tax return with their spouse, often detailing their own income, deductions, and liabilities.

Multiple Support Agreement

An agreement where two or more individuals provide more than half of a person's support, but no single individual contributes over 50%, allowing them to take turns claiming the dependent on their taxes under certain conditions.