Provide possible reasons for this difference based on data

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In 2005 IBM had a return on equity of 26.7 percent, whereas Hewlett-Packard's return was only 6.4 percent. Use the decomposed ROI framework to provide possible reasons for this difference based on the data below:

IBM

HP

NOPAT/Sales

9.0%

2.7%

Sales/Net Assets

2.16

2.73

Effective After-Tax Interest Rate

2.4%

1.1%

Net Financial Leverage

0.42

-0.16

Reference no: EM131146807

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