1. Julie, Inc. and Joseph, Inc. are two companies in shoe manufacturing owned by JJ, Inc. They make and market shoes for women and men respectively. In the annual meeting held to review the companies' performance, the board was told that both companies have earned a return on equity of 15%. One of the directors has a management consultancy industry background and she has worked out the following breakup:

   Julie, Inc. Joseph, Inc.

   ROE 15% 15%

   Net Profit Margin 7.5% 10%

   Total assets turnover 2 1

   Financial leverage ratio 1 1.5

   What would be your recommendation to the board based on the above illustrative information? Attempt to offer specific and concrete recommendations on profitability, use of assets, and use of debt.