Ashley\'s Garden Supply and Terri\'s Home Market have identical assets, debt-to-

Question

Ashley's Garden Supply and Terri's Home Market have identical assets, debt-to-equity ratios, and profit margins. However, Ashley's ROA is higher than Terri's. Therefore, it must be true that:

Ashley's has a lower total asset turnover than Terri's.

Terri's ROE is higher than Ashley's.

Ashley's uses its assets more efficiently to generate sales.

Ashley's operating efficiency is higher than Terri's.

Ashley's has a lower total asset turnover than Terri's.

Terri's ROE is higher than Ashley's.

Ashley's uses its assets more efficiently to generate sales.

Ashley's operating efficiency is higher than Terri's.

Explanation / Answer

the correct choice is Ashley's operating efficiency is higher than Terri's

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