Question: Return on equity ( ROE ) equals profit margin times asset turnover times leverage. The following information is given:YearReturn on Equity ( ROE ) Profit

Return on equity (ROE) equals profit margin times asset turnover times leverage. The following information is given:YearReturn on Equity (ROE)Profit MarginAsset TurnoverLeverage201210.55 percent2.60 percent1.333.051201311.74 percent1.80 percent2.272.873
Based on the breakdown of the DuPont framework, which of the following statements is true regarding Company X?
Company X is more profitable in 2013 than in 2012.
Company X has more assets in 2013 than in 2012
Company X has a lower assets to equity ratio in 2013 than in 2012.

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