Company A and Company B have the same gross profit margin and the same total asset turnover,but company A has a higher return on equity.This may result from
A) Company B has more common stock.
B) Company A has a lower debt ratio.
C) Company A has lower selling and administrative expenses, resulting in a higher net profit margin.
D) Company A has lower cost of goods sold, resulting in a higher net profit margin.

Question

Quizplus · Accepted Answer

The Answer of Company A and Company B have the same gross profit margin and the same total asset turnover,but company A has a higher return on equity.This may result from
A) Company B has more common stock.
B) Company A has a lower debt ratio.
C) Company A has lower selling and administrative expenses, resulting in a higher net profit margin.
D) Company A has lower cost of goods sold, resulting in a higher net profit margin.

Company a and Company B Have the Same Gross Profit