The DuPont System of Analysis is a diagnostic tool that uses financial ratios to evaluate a companys financial health. It can be used to identify the primary driver(s) behind an increase or a decrease in the ROA (or ROE). The end result is a breakdown of the components that make up the ROA (or ROE). Which of the following is false?

Group of answer choices

The net profit margin can be viewed as the product of operating profit margin, a ratio that measures the impact of interest expenses on profits, and a ratio that measures the impact of taxes on profits.

A firms ROA is indicative of its profitability and efficiency.

A firm with a leverage of 3 would indicate that $3 in assets have been financed by $1 in liabilities.

For any given ROA, the greater the use of debt in the firms capital structure, the greater the ROE.