A decomposition of ROE for Company A and $B$ is as follows:

Which of the following choices best describes reasonable conclusions an analyst might make

based on this ROE decomposition?

A$.$ Company A$\text{'}$s ROE is higher than Company B$\text{'}$s in $2005,$ apparently reflecting a

strategic shift by Company A to a product mix with higher profit margins

B$.$ Company A$\text{'}$s ROE is higher than Company B$\text{'}$s in $2005,$ which suggests that Company

A may have purchased new, more efficient equipment

C$.$ Company A$\text{'}$s ROE is higher than Company B$\text{'}$s in $2005,$ but the difference between

the two companies' ROE is very small and was mainly the result of Company A$\text{'}$s

increase in its financial leverage

D$.$ None of the above