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The following comparison is presented for Pro Classic, Inc. to the industry averages:IndustryPro ...

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The following comparison is presented for Pro Classic, Inc. to the industry averages:IndustryPro ...

The following comparison is presented for Pro Classic, Inc. to the industry averages:
   Industry
   Pro Classic, Inc.   Averages
   Return on assets   21.0%   10.2%
   Profit margin before income taxes   10.0%   6.0%
   Total asset turnover   3.5   2.6
   Profit margin after income tax   6.7%   3.3%
   Return on equity after income taxes   23.4%   18.4%
   Return on equity before income taxes   18.3%   10.9%
What conclusion can be drawn when comparing Pro Classic's profit margin after income tax to the industry average?
A) Pro Classic is earning more after-tax income on its sales than the industry average.
B) Pro Classic is earning more on its assets than the industry average.
C) Pro Classic is using its assets more efficiently to generate sales than the industry average.
D) Pro Classic's assets are contributing more to earnings than the industry average.

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Survey of Accounting: Making Sense of Business

Edition: 1^st

Author: Terrell

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LiChan Author

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How do you know this stuff so well, wish I was as smart

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