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KarenSmith KarenSmith
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7 years ago
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 return on equity after income taxes to the industry average?
A) Pro Classic's sales are contributing more to earnings than the industry average.
B) Pro Classic is earning more on its assets than the industry average.
C) Pro Classic is earning more after-tax income on its assets than the industry average.
D) Pro Classic is earning more after-tax income on its investment by owners than the industry average.
Textbook 
Survey of Accounting: Making Sense of Business

Survey of Accounting: Making Sense of Business


Edition: 1st
Author:
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mourningbirdmourningbird
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KarenSmith Author
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7 years ago
Many thanks
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#3
7 years ago
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