Consider the following financial data for Lopez Enterprises:

Balance Sheet as of December 31, 2012
Cash & equivalents	$	122,500		Accounts payable	$	55,500
Accts. receivable		130,500		Notes payable		94,000
Inventories		118,500		Accrued wages & taxes		42,000
Total current assets	$	371,500		Total current liabilities	$	191,500
				Long-term debt		281,500
Net plant & equip.		705,500		Common equity		604,000
Total assets	$	1,077,000		Total liab. & equity	$	1,077,000
Statement of Earnings for 2012				Industry Average Ratios
Net sales	$	1,195,500		Current ratio		2.3
Cost of sales		801,000		Quick ratio		1.8
Gross profit	$	394,500		Days sales outstanding		35 days
Operating expenses		289,000		Inventory turnover		6.4
EBIT	$	105,500		Total asset turnover		1.4
Interest expense		16,500		Net profit margin		3.0%
Pre-tax earnings	$	89,000		Return on assets		4.2%
Income taxes (30%)		26,700		Return on equity		10.0%
Net income	$	62,300		Debt ratio		58%

Compared to other firms in the same industry, Lopez...

	a.	has a higher profit margin.
	b.	generates less profit per dollar of shareholders' equity.
	c.	has a lower inventory turnover ratio.
	d.	is less likely to have trouble paying its short-term debts.
	e.	uses more debt financing.