Selected information for a company and the common size data for its industry are provided below.
| Company(€) | Common Size Industry Data (% of sales) | |
| EBIT | 76,000 | 28.0 |
| Pretax profit | 66,400 | 19.6 |
| Net income | 44,500 | 13.1 |
| Sales | 400,000 | 100.0 |
| Total assets | 524,488 | 140.0 |
| Total equity | 296,488 | 74.0 |
| ROE | 15.0% | 17.7% |
Which of the following is most likely a contributor to the company’s inferior ROE compare to that of the industry? The company’s:
C is correct.
