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Pixie s Boutique and Jim s Wardrobe are two companies in the apparel industry. They have the same return on equity ( ROE ) ratio:

Pixies Boutique and Jims Wardrobe are two companies in the apparel industry. They have the same return on equity (ROE) ratio: 45%. Also, the ratios for each of these companies for the current financial year are as stated in the table provided below:
RATIO PIXIES BOUTIQUE JIMS WARDROBE
Profit margin 30%15%
Total asset turnover 0.506
Financial leverage 30.5
Explain how Pixies Boutique has the same ROE as Jims Wardrobe despite having a higher profit margin.

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