Question:Firm A has a Return on Equity (ROE) equal to 24%, while firm B has a ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, while firm B has an asset turnover ratio equal to 0.4. From this, it can be assessed that ______.
A Firm A has a higher profit margin than firm B
B Firm B has a higher profit margin than firm A
C Firm A and B have the same profit margin
D Firm A has a higher equity multiplier than firm B
E more information is needed to say anything about the firm's profit margin
+ AnswerB
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