which of the following choices best describes reasonable conclusions an analyst migh 609716

A decomposition of ROE for Integra SA is as follows:

FY12

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which of the following choices best describes reasonable conclusions an analyst migh 609716
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FY11

ROE

18.90%

18.90%

Tax burden

0.70

0.75

Interest burden

0.90

0.90

EBIT margin

10.00%

10.00%

Asset turnover

1.50

1.40

Leverage

2.00

2.00

Which of the following choices best describes reasonable conclusions an analyst might make based on this ROE decomposition?

A. Profitability and the liquidity position both improved in FY12.

B. The higher average tax rate in FY12 offset the improvement in profitability, leaving ROE unchanged.

C. The higher average tax rate in FY12 offset the improvement in efficiency, leaving ROE unchanged.

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