Assume the following:

RatioFirmIndustry

Net Profit Margin1.7%1.2%

Equity multiplier2.6x2.5x

Total Asset Turnover1.7 x3.0 x

Return On Equity7.6%9.0%

A. Relative to the industry, the firm's shareholders have inferior return on equity due to inefficient management of assets.

B. Relative to the industry, the firm's shareholders have inferior return on equity due to the company's profit on sales.

C. The information presented above provides no indication as to why the firm has inferior return on equity relative to the industry.

D. Relative to the industry the firm's shareholders have inferior return on equity due to the how the company was financed.