Consider two hypothetical companies, Company X and Company Y$,$ op$-$

erating in the same industry. Both companies have similar asset turnover

ratios, but their return on equity $($ROE$)$ figures differ. Company X has a

higher profit margin compared to Company Y$.$

a$)$ Define the DuPont analysis and explain how it can be used to analyze

a company$$s return on equity.

b$)$ Given the information provided, discuss how the differences in profit

margin and return on equity between Company X and Company Y could

be further analyzed using the DuPont analysis framework. Include in

your discussion the potential role of financial leverage and asset turnover

in explaining the disparities in ROE. Also, consider the implications of

higher financial leverage on risk and return.

c$)$ Suggest possible reasons why Company X might have a higher profit

margin but a lower return on equity compared to Company Y$,$ based

on your understanding of the DuPont analysis. Discuss whether, on a

risk$-$adjusted basis, Firm X might offer a more attractive investment op$-$

portunity despite its lower ROE, considering both profitability and risk

factors