The following information was obtained from the 2017 financial reports of Hathaway Toy Company and Yakima Manufacturing:

Assume that the only change to shareholders€™ equity during 2017 is due to net income earned in 2017. The number of outstanding shares is 80,000 for Hathaway and 35,000 for Yakima.

REQUIRED:
a. Which company is more effective at managing the capital provided by the owners?
b. Which company is more effective at managing capital provided by all investors?
c. Compute the earnings per share for each company.
d. Is Yakima Manufacturing using its debt effectively for the equity owners?

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Hathaway Toy Yakima Mfg. $ 195,000 Interest expense Net income Current liabilities Mortgage payable Common stock Retained earnings Total liabilities and shareholders' equity $ 875,000 755,000 240,000 25,000 1,850,000 1,715,000 500,000 745,000 325,000 $2,700,000 $2,700,000