Pixie s Boutique and Jim s Wardrobe are two companies in the apparel industry. They have the
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Pixies Boutique and Jims Wardrobe are two companies in the apparel industry. They have the same return on equity ROE ratio: Also, the ratios for each of these companies for the current financial year are as stated in the table provided below:
RATIO PIXIES BOUTIQUE JIMS WARDROBE
Profit margin
Total asset turnover
Financial leverage
Explain how Pixies Boutique has the same ROE as Jims Wardrobe despite having a higher profit margin.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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