If a company\'s actual results for revenues, net profits, EPS, and ROE turn out

Question

If a company's actual results for revenues, net profits, EPS, and ROE turn out to be worse than projected, then it is usually because of one or more of the following financial factors: the company's dividend payout ratio was too large, the company's debt-to-assets ratio was too high, the company's operating profit margin fell below 15.0%, the company's current ratio fell below 1.0, and/or company managers did not repurchase enough shares of common stock. of a combination of three factors: (1) managers failed to win one or more bids to supply private-label footwear to chain retailers, (2) the company incurred unexpectedly large unfavorable shifts in exchange rates, and/or (3) a number of rival firms unexpectedly decided to offer free shipping to customers purchasing footwear at their Internet sites. company managers underestimated the amount of interest costs the company had to pay on its outstanding debt (which reduced the company's operating profit margin and net profit margin below the levels need to achieve the projected outcomes). the competitive efforts exerted by rival companies to capture sales and market share for themselves in one or more geographic regions proved stronger than company managers anticipated, given the estimates they entered for the various industry averages affecting Internet sales and branded wholesale sales on the Sales Forecast screen. managers failed to ship enough branded pairs to one of more of the company's distribution warehouses and could not supply all of the pairs that customers wanted to purchase.

Explanation / Answer

A firm might lose its sales revenue and market share if it is unable to respond rivals market strategy to acquire market share. In the given case most probably the firm lost its market share to its rival due to their exerted efforts in one or more geographic region. This negatively affected firms sales and reduced its revenue, which in result worsen net income, EPS (Earnings per Share), and ROE (Return on Equity).

Thus, the correct answer is 4th option.

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