Question: Firm X has a higher Net Profit Margin but lower ROE than Firm Y . Explain the reasons for this difference. Firm X Firm Y

Firm X has a higher Net Profit Margin but lower ROE than Firm Y. Explain the reasons for
this difference.
Firm X Firm Y
Net Profit Margin 10.00%8.00%
Asset Turnover 2.001.80
Equity Multiplier 1.753.00
ROE 35.00%43.20%

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