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Easton Tech and Ellis Integrated Each Have the Same Total

Question 3

Multiple Choice

Easton Tech and Ellis Integrated each have the same total assets, the same level of sales, and the same return on equity (ROE) . Easton Tech, however, has less equity and a higher debt ratio than does Ellis Integrated. Which of the following statements is most correct?


A) Ellis Integrated has a higher net income than Easton Tech.
B) Ellis Integrated has a higher profit margin than Easton Tech.
C) Ellis Integrated has a higher return on assets (ROA) than Easton Tech.
D) All of the statements above are correct.
E) None of the statements above is correct.

Correct Answer:

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