A firm’s profit margin is less than its peer group’s return. Which of the following statements draws an incorrect implication from this comparison between asset utilization ratios? The firm has fewer problems generating revenues and controlling costs than its peers.

The firm has a higher cost per dollar of revenue than its peers.

The firm may not be managing its cost of goods and operating expenses as well as its peers.

The firm’s return is less than the peer group’s return; the firm appears to be managing its income statement poorly in comparison with its peers.