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A company shows a decrease in its ROE compared to the previous year. Using the DuPont analysis, it realized that what could have caused this
A company shows a decrease in its ROE compared to the previous year. Using the DuPont analysis, it realized that what could have caused this decrease was that its profit margin, measured by Net Profit Margin, decreased by more than 30% compared to the previous year. Therefore, the company would have to make the following adjustments to increase its NPM and therefore its ROE the following year:
A. decrease debt and reduce operating expenses
B. consider raising the prices of your products and reducing your operational expenses
C. increase debt
D. consider lowering the prices of your products and maintaining operational expenses
E. should not make any changes at this time and wait for another additional year of results
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