which of the following choicesbestdescribes reasonable conclusions an analyst might 599692
A decomposition of ROE for Integra SA is as follows:
|
FY12 |
FY11 |
|
|
ROE |
18.90% |
18.90% |
|
Tax burden |
0.70 |
0.75 |
|
Interest burden |
0.90 |
0.90 |
|
EBIT margin |
10.00% |
10.00% |
|
Asset turnover |
1.50 |
1.40 |
|
Leverage |
2.00 |
2.00 |
Which of the following choicesbestdescribes reasonable conclusions an analyst might make based on this ROE decomposition?
A. Profitability and the liquidity position both improved in FY12.
B. The higher average tax rate in FY12 offset the improvement in profitability, leaving ROE unchanged.
C. The higher average tax rate in FY12 offset the improvement in efficiency, leaving ROE unchanged.