A corporation being analyzed has a return on equity (ROE) of 14.3 percent compared to the industry average of 11.8 percent. Which of the following statements about the company, based on the DuPont equation, could explain the higher than average ROE ()
A. The net profit margin is lower than the industry average, but the company is using a higher proportion of debt financing than the industry average.
B. All of the statements could explain the higher than average ROE.
C. The asset turnover is lower than the industry average, but the net profit margin is higher than the industry average.