A decomposition of ROE for Integra SA is as follows: Which of the following choices best describes

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A decomposition of ROE for Integra SA is as follows:

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Which of the following choices best describes reasonable conclusions an analyst might make based on this ROE decomposition?
A Profitability and the liquidity position both improved in FY12.
B. The higher average tax rate in FY12 off set the improvement in profitability, leaving ROE unchanged.
C. The higher average tax rate in FY12 off set the improvement in efficiency, leaving ROE unchanged.

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International Financial Statement Analysis CFA Institute Investment Series

ISBN: 9780470287668

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Authors: Thomas R. Robinson, Hennie Van Greuning CFA, Elaine Henry, Michael A. Broihahn, Sir David Tweedie

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Question Posted: Feb 14, 2024 09:00 AM

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A decomposition of ROE for Integra SA is as follows: Which of the following choices best describes

Question:

ROE Tax burden Interest burden EBIT margin Asset turnover Leverage FY12 18.90% 0.70 0.90 10.00% 1.50 2.00 FY11 18.90% 0.75 0.90 10.00% 1.40 2.00

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Based on the ROE decomposition for Integra SAit is not possible to draw conclusions about the compan...View the full answer

International Financial Statement Analysis CFA Institute Investment Series

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