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

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.

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.

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