WidgetCo and Tools Inc -Which of the Following Statements Best Explains the Difference in They

WidgetCo and Tools Inc. both operate in the same industry. They are capital-intensive companies producing widgets. Below are selected data
$$\begin{array} { | l | c | c | } \hline & \text { WidgetCo } & \text { Tools } \\\hline \begin{array} { l } \text { Net operating assets /common } \\\text { equity }\end{array} & 1.37 & 1.53 \\\hline \text { Net operating profit margin } & 19 \% & 21 \% \\\hline \text { Income tax rate } & 47 \% & 28 \% \\\hline \text { Revenues/net operating assets } & 0.81 & 0.61 \\\hline \text { EBIT/revenues } & 38 \% & 32 \% \\\hline\end{array}$$
-Which of the following statements best explains the difference in observed net operating asset turnovers?

A) WidgetCo's lower financial leverage
B) WidgetCo uses FIFO and Tools uses LIFO
C) WidgetCo's lower tax rate
D) WidgetCo has significant operating leases and Tool has no leases

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