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Why firm b has a higher profit margin than firm a

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Reference no: EM132538890

Question 1: Firm A has a ROE of 24%, while Firm B has a ROE of 15% during the same year. Both firms have a total debt ratio of 0.8%. Firm A has an asset turnover ratio of 0.9 , while firm B has an asset turnover of 0.4. Using the Du Pont equation explain and show steps why " Firm B has a higher profit margin than firm A.

Reference no: EM132538890

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