In the extended DuPont equation, a firm's ROE reflects (1) its use of debt financing, or leverage, as reflected by its (2) the efficiency with which it uses its assets, as measured by the its production costs and operating expenses, as summarized by its , and (3) its ability to generate sales and manage In contrast, sometimes it is useful to focus just on asset profitability and financial leverage. In this case, you would use the traditional version of the equation, in which the firm's efficiency and profitability metrics are multiplied and summarized in a single measure, the In this analysis, a company's financial performance is expected to result from both management's financing decisions and its effectiveness and efficiency in generating profits using the firm's asset base Most investors and analysts in the financial community observe a firm's ROE closely. The ROE can be calculated by dividing the firm's net income by the shareholders' equity, or it can be reduced into the key factors that drive the ROE. Investors and analysts like to focus on these drivers to develop a more holistic image of what is changing within a company An analyst collected the following fiscal year 2018 data for firms operating in the agricultural sector. Use the data to compute the net profit margin (NPM), total asset turnover (TAT), and equity multiplier (EM) values required for a DuPont analysis. (Note: The following dollar values are expressed in millions of U.S. dollars.) Total Common Equity $3,933 $6,510 $5,195 Net Firm Assets Sales Income NPM TAT EM ROE $35,050 $17,078 $37,402 $67,713 $8,170 $24,363 $7,498 $1,113 $3,907 11.07% 8.91 13.62% 0.48 0.65 7.20 Referring to this data, which of the following conclusions is true about the companies' ROEs? O Compared to companies A and C, company B uses more financial leverage and exhibits the highest debt ratio O Compared to firms B and C, company A's exceptional ROE performance appears to result from its superior efficiency in using its asset base and its heavily leveraged capital structure. O Compared to firms B and C, company A does the best job of containing its costs and managing its tax obligations O Firm A's equity multiplier indicates that it has the lowest debt ratio of the three firms