An analyst gathered the following data abo

问题单项选择题

An analyst gathered the following data about a company:

The company’s return on equity:（）

A. decreased because the company’s profit margin fell.

B. increased because the company’s leverage multiplier rose.

C. increased because the company’s asset turnover increased.

答案

参考答案：A

解析：

ROE 2006=0.7×0.85×0.15×1.5×1.5=0.2008 ROE 2007=0.7×0.85×0.10×1.8×1.6=0.1714 Profit margin fell, and the increase in the total asset turnover ratio and the leverage multiplier were not enough to offset the decline, so ROE fell.