A decomposition of ROE for Integra $SA$ is as follows:

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 FY$12.$

B$.$ The higher average tax rate in FY$12$ offset the improvement in profitability, leaving

ROE unchanged.

C$.$ The higher average tax rate in FY$12$ offset the improvement in efficiency, leaving ROE

unchanged.

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

An analyst is most likely to conclude that:

A$.$ Company A$\text{'}$s ROE is higher than Company B$\text{'}$s in FY$15,$ and one explanation con$-$

sistent with the data is that Company A may have purchased new, more efficient

equipment.

B$.$ Company A$\text{'}$s ROE is higher than Company B$\text{'}$s in FY$15,$ and one explanation consis$-$

tent with the data is that Company A has made a strategic shift to a product mix with

higher profit margins.

C$.$ the difference between the two companies' ROE in FY$15$ is very small and Company

A$\text{'}$s ROE remains similar to Company B$\text{'}$s ROE mainly due to Company A increasing

its financial leverage.

What does the $\frac{P}{E}$ ratio measure?

A$.$ The "multiple" that the stock market places on a company's EPS.

B$.$ The relationship between dividends and market prices.

C$.$ The earnings for one common share of stock.