You observe the following about Grandpa Mike's Ice Cream Shops:

Total Operating Capital 2018 = 2,300,000

NOPAT 2018 = 90,000

Total Sales 2018 = 4,800,000

Operating Profitability 2017 = 3.25%

Capital Requirements Ratio 2017 = 32.5%

ROIC 2017 = 9.5%

Cost of Capital = WACC = 9.00%

Which of the following statements is CORRECT?

Pick 1

ROIC in 2018 fell vs ROIC in 2017 only due to a decline in operating profitability.

The 2018 ROIC indicates that investors got the return they require on invested capital.

ROIC in 2018 fell vs ROIC in 2017 due to a decline in operating profitability and an increase in the operating capital required to generate a dollar of sales.

The Capital Requirement Ratio rose in 2018, which means Grandpa Mike's capital utilization improved vs 2017.

ROIC in 2018 rose vs ROIC in 2017 due to a increase in operating profitability and a decrease in the operating capital required to generate a dollar of sales.