The following DuPont framework ratios are for Iffy Company and Benchmark Company:
Return on Sales Asset Turnover Assets-to-Equity
Iffy 5% 2.0 2.0
Benchmark 7% 1.5 2.0
Benchmark Company is viewed as the best company in Iffy's industry, the company against which all other companies in the industry compare themselves.
Which ONE of the following statements is TRUE?
Iffy Company has an efficiency problem.
Iffy Company has a leverage problem.
Iffy Company has a liquidity problem
Iffy Company has a profitability problem.
