Page 72 - FINAL CFA I SLIDES JUNE 2019 DAY 7

Session Unit 7:
27. Financial Analysis Techniques

tanties

ROE declined driven by asset turnover and net profit margin but
mitigated by a significant increase in leverage.

CFA concerned about the net margin and determine the
combination of pricing pressure and/or increasing expenses that

caused this.

Note that the company has become more risky due to increased debt
financing.