This quiz is a part of the CFA Level 1 reading 'Financial Analysis Techniques'. 

Financial Analysis Techniques

Firm A has a higher profit margin than firm B

Firm B has a higher profit margin than firm A

If the two companies have the same basic earning power (BEP), Company B will have a higher return on assets.

If the two companies have the same return on assets, Company B will have a higher return on equity.

If the two companies have the same level of sales and basic earning power (BEP), Company B will have a lower profit margin.

The firm has a higher P/E ratio than other firms in the industry.

The firm is more likely to avoid insolvency in short run than other firms in the industry.

The firm may be less profitable than other firms in the industry.

The firm is less likely to avoid insolvency in the short run than other firms in the industry.

The firm is less profitable than other firms in the industry.

The firm is utilizing assets less efficiently than other firms in the industry.

The firm is more likely to avoid insolvency in the short run than other firms in the industry.

The firm is more profitable than other firms in the industry.