XY Corporation ($ in millions) BALANCE SHEETS

2020 2019 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 2020 2019

Sales 1,400,000 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 2020 and 2019?

2020s ROE decreased because of a smaller use of debt and a lower average collection period.

2020s ROE decreased because of a higher asset turnover and a greater use of debt.

2020s ROE decreased because of a rising net profit margin and a greater use of debt.

2020s ROE decreased because of a rising net profit margin and a higher asset turnover.