You observe that a firm's ROE is above the industry average, but its profit margin and debt ratio are both below the industry average. Which of the following statements is CORRECT? Its total assets turnover must equal the industry average. Its total assets turnover must be above the industry average. Its return on assets must equal the industry average. Its TIE ratio must be below the industry average. Its total assets turnover must be below the industry average. 1

Its return on assets must equal the industry average.

Option 3.

Explanation:

ROE increases with the increase in the debt ratio. If a firm's debt ratio is lower than the industry average, then the result of this would be its ROE to fall also below industry average, all else the same.

But since its ROE is above industry average, it means that all else is not the same. Talking in a particular context, its return on assets must be above industry average to compensate for the below industry debt ratio.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know