atios:

Current Ratio: 3.6093

Quick Ratio: 2.1799

Times Interest Earned: 9.9143

ROE 16.48%

ROA 12.01%

Equity Multiplier 1.3714

Inventory Turnover 1.3489

The DuPont Identity helps us to better understand why a firm might have a poor ROE (Return on Equity). We can write the DuPont Identity as follows:

ROE = (Net Income / Sales)(Sales / Assets)(Assets / Owner's Equity)

Based on this, which of the following statements are true?

Select one:

a. If Sales remained constant but Net Income fell, the ROE would rise, ceteris paribus (all else remaining equal)

b. If Sales remained constant but the firm sold off half of its Assets, the ROE would rise, ceteris paribus (Assume that the Equity Multiplier remains constant)

c. If Assets remain constant but Owners Equity goes up, the ROE would rise, ceteris paribus.

d. All of the above statements are true