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Which is a 100% true statement after analyzing the three companies below using the DuPont Identity: ROE Profit Margin Total Asset Turnover Equity Multiplier A
Which is a 100% true statement after analyzing the three companies below using the DuPont Identity:
ROE | Profit Margin | Total Asset Turnover | Equity Multiplier | ||
A | Stata Corp | 12% | 22% | 0.45 | 1.25 |
B | Drake Corp | 17% | 9% | 0.35 | 5.25 |
C | Golf Corp | 12% | 16% | 0.62 | 1.20 |
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Golf Corp is definitely the best investment, no doubt about it | ||
Drake Corp has the highest ROE because they have much more leverage than the other firms. | ||
Stata corp would make a good investment because it has the best total asset turnover of the three firms | ||
Golf Corp is the best in terms of converting sales into net income |
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