QUESTION 3 The following presents the balance sheet for Firm K, along with information from the income statement. A competitor, Firm F, has a profit margin of 15%, an asset turnover ratio of 0.8, and an equity multipler of 3.33. Which statement below is folse? Total Assets 2,000 Income Statement Information Current Assets 600 Revenue: 3,500 Cash: 100 EBIT: 800 Receivables 200 Net Income: 200 Inventory: 300 o Noncurrent Assets 1,400 .Net PPSE 1.100 Other NCA 300 Total Liabilities: 1.500 o Current Liabilities: 700 Current Debt: 250 Payables: 300 Accruals: 150 Noncurrent Liabilities: 800 Long Term Debt: 800 Total Equity Common Stock 400 o Retained Earnings 100 Firm has an inflated ROE due to the amount of leverage it has Firm K's profit margin is on par with Firm Firm K is likely more risky than Firm Firm Fuses its assets more efficiently than Firmk 500