Question 42 pts

XY Corporation ($ in millions)
BALANCE SHEETS	2017	2016
ASSETS
Cash & marketable securities	$40,000	$50,000
Accounts receivable	300,000	500,000
Inventories	500,000	400,000
Net fixed assets	400000	300000
LIABILITIES & EQUITY
Accounts payable	170,000	130,000
Bank loan	90,000	90,000
Accruals	70000	80000
Long-term debt	100,000	300,000
Other liabilities	0	0
Common stock	350000	350000
Retained earnings	$460,000	$300,000
INCOME STATEMENTS	2017	2,016
Sales	1,500,000	1,300,000
Cost of goods sold	800,000	780,000
Selling, general & admin,	$150,000	$150,000
Marketing	150000	130000
Depreciation	53000	40000
Interest	57000	45000
Income taxes	116000	62000

Which of the following does not explain how financial performance (i.e. ROE) differed between 2017 and 2016?

Group of answer choices

2017s ROE rose because of a rising net profit margin and a greater use of debt.

2017s ROE rose because of a rising net profit margin and a higher asset turnover.

2017s ROE rose because of a smaller use of debt and a lower average collection period.

2017s ROE rose because of a higher asset turnover and a greater use of debt.