Which of the following firms would be expected to have a high ROE based on that firm's high operating efficiency?
A)a high-end fashion retailer that has a very high mark-up on all items it sells
B)a grocery store chain that has very high turnover, selling many multiples of their assets per year
C)a medical supply company that provides very precise instruments at a high price to large medical establishments such as hospitals
D)a brokerage firm that has high levels of leverage

Question

Quizplus · Accepted Answer

The grocery store chain with high turnover is expected to have a high ROE based on its high operating efficiency. The high turnover indicates that the company is generating a significant amount of sales relative to its total assets, indicating high efficiency.

Which of the Following Firms Would Be Expected to Have