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You Are an Analyst Following Two Companies, Company X and Company

Question 72

Multiple Choice

You are an analyst following two companies, Company X and Company Y. You have collected the following information: • The two companies have the same total assets.
• Company X has a higher total assets turnover than Company Y.
• Company X has a higher profit margin than Company Y.
• Company Y has a higher inventory turnover ratio than Company X.
• Company Y has a higher current ratio than Company X.
Which of the following statements is most correct?


A) Company X must have a higher net income.
B) Company X must have a higher ROE.
C) Company Y must have a higher quick ratio.
D) Statements a and b are correct.
E) Statements a and c are correct.

Correct Answer:

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