Answer the following questions based on the information provided. a. Calculate each company's ROE, ROA, and ROIC.

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Answer the following questions based on the information provided. image text in transcribed

a. Calculate each company's ROE, ROA, and ROIC.

b. Why is company B's ROE so much higher than A's? Does this mean B is a better company? Why or why not?

c. Why is company A's ROA higher than B's? What does this tell you about the two companies?

d. How do the two companies' ROICs compare? What does this suggest about the companies?AppendixLO1

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Analysis For Financial Management

ISBN: 9780071181174

6th Edition

Authors: Robert Higgins

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Question Posted: Sep 19, 2024 02:30 PM

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Answer the following questions based on the information provided. a. Calculate each company's ROE, ROA, and ROIC.

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($ millions) Company A Earnings before interest and taxes $150 Company B $280 Interest expense 10 80 Earnings before tax 140 200 Taxes at 40% 56 80 Earnings after tax 84 120 Debt $100 $800 Equity 400 200

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Analysis For Financial Management

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