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Use the following data to compute each firm's net profit margin, total asset turnover, equity multiplier, and return on equity. (Note: The following dollar values
Use the following data to compute each firm's net profit margin, total asset turnover, equity multiplier, and return on equity. (Note: The following dollar values are expressed in millions of U.S. dollars.) Total Assets $28,141 Common Equity $8,700 Total Asset Turnover Firm Equity Multiplier Net Profit Margin 14.70% Return on Equity Sales $10,636 Net Income $1,563 $180 $1,496 A 3.23 B $2,431 $18,158 0.99% $5,641 $28,199 3.22x 0.34x $10,669 $9,516 2.64 Referring to this data, which of the following conclusions is true about the companies' ROES? Firm A's equity multiplier indicates that it has the lowest debt ratio of the three firms. Compared to companies A and C, company B uses more financial leverage and exhibits the highest debt ratio. Compared to firms B and C, company A's exceptional ROE performance appears to result from its superior efficiency in using its asset base and its heavily leveraged capital structure. Compared to firms B and C, company A does the best job of containing its costs and managing its tax obligations
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