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Companies Smith and Jones are both profitable, and they have the same total assets, sales, return on assets, and profit margin. However, Company Smith has
Companies Smith and Jones are both profitable, and they have the same total assets, sales, return on assets, and profit margin. However, Company Smith has a higher debt ratio than Company Jones. Which of the following statements is correct? a Company Smith has a higher ROE than Company Jones. b Company Smith has a lower total assets turnover than Company Jones. c Company Smith has a lower operating income (EBIT) than Company Jones. d Company Smith has a lower equity multiplier than Company Jones. 2 points
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