Assume the following data for Cable Corporation and Multi-Media Inc. a. Compute the return on stockholders equity

Question:

Assume the following data for Cable Corporation and Multi-Media Inc.

a. Compute the return on stockholders’ equity for both firms using ratio 3a. Which firm has the higher return?

b. Compute the following additional ratios for both firms:

Net income/Sales

Net income/Total assets

Sales/Total assets

Debt/Total assets

c. Discuss the factors from part b that added or detracted from one firm having a higher return on stockholders’ equity than the other firm as computed in part a.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations Of Financial Management

ISBN: 9781260013917

17th Edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

See More Books

Question Posted: May 27, 2022 09:33 AM

See More Questions

Assume the following data for Cable Corporation and Multi-Media, Inc. a. Compute return on stockholders equity for both firms using ROE-ratio Net income / stockholders equity. Which firm has the...
Assume the following data for Lusk Inc. before its year-end adjustments: Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns? Unadjusted...
Assume the following data for Casper Company before its year-end adjustments: Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns?...
On June 30, 2011, Prego Equipment purchased a precision laser-guided steel punch that has an expected capacity of 300,000 units and no residual value. The cost of the machine was $450,000 and is to...
Identify the ramifications of antitrust (antimonopoly) laws and product liability laws.
What is the leverage capital ratio and why do regulators specify a minimum for it?
The directors of Bellini plc, a Stock Exchange listed business, are contemplating purchasing some of its own shares in the market, and cancelling them, as an alternative to paying a dividend. Some of...
Flex Displays designs and manufactures displays used in mobile devices. Serious flooding throughout North Carolina affected Flex Displays facilities. Inventory was completely ruined, and the companys...
Lion, Incorporated has 1 million common shares outstanding and a stock price of $35 per share. The company uses the straight-line method of depreciation to depreciate its fixed assets, and reports...
Refer to the information in E5-4 for Olaf Corp. and the following additional information: In E5-4 Olaf Corp. uses a perpetual inventory system. The company had the following inventory transactions in...
Jerry Rice and Grain Stores have $4,780,000 in yearly sales. The firm earns 4.5 percent on each dollar of sales and turns over its assets 2.7 times per year. It has $123,000 in current liabilities...
Omni Technology Holding Company has the following three affiliates: a. Which affiliate has the highest return on sales? b. Which affiliate has the lowest return on assets? c. Which affiliate has the...
Global expansion strategies allow an organization to seek new opportunities. Technology has led to increased global competitiveness of many organizations. Explore the web sites for AT&T, Coca-Cola,...
Noeleen AutoMall, Ltd. recently completed an initial public offering(IPO) for$23,000,000 by listing its common shares on the New York Stock Exchange. Prior to itsIPO, Noeleen was a privately held...
Process Costing- increased units, FIFO method Answer in good form 25 26 Illustrative Problem-Cost of Production Report using Treatment by Neglect Dept 1-100% of materials are added at the beginning....
Write a C++ program that prompts the user to enter a letter and encrypt it using the following method: if the letter is an upper-case letter the program replaces the letter by the 7th letter in the...
Turn this information into an excel sheets with the excel formulas being shown P12.4 (LO 1) (Payroll Tax Entries) The following is a payroll sheet for Otis Imports for the month of September 2025....
What is the major factor preventing women of the Indian diaspora from engaging in elaborate rituals? Group of answer choices Lack of motivation or devotion Because rituals are tied to a place and...
A supervisor is both a key person and just another worker. Explain this phenomenon.
Consider the following cash flows in Table P5.5. (a) Calculate the payback period for each project. (b) Determine whether it is meaningful to calculate a payback period for project D. (c) Assuming...
The Hamilton Corporation Company has 4 million shares of stock outstanding and will report earnings of $6,910,000 in the current year. The company is considering the issuance of 1 million additional...
American Health Systems currently has 6,400,000 shares of stock outstanding and will report earnings of $10 million in the current year. The company is considering the issuance of 1,700,000...
American Health Systems has 6,400,000 shares of stock outstanding and will report earnings of $10 million in the current year. The company is considering the issuance of 1,700,000 additional shares,...
What is Apple Companys strategy for success in the marketplace? Does the company rely primarily on customer intimacy, operational excellence, or product leadership? What evidence supports your...
Exercise 1 1 - 7 ( Algo ) Net present value and unequal cash flows LO P 3 Gomez is considering a $ 2 1 0 , 0 0 0 investment with the following net cash flows. Gomez requires a 1 2 % return on its...
a Campbell Inc. produces and sells outdoor equipment. On July 1, 2011. Campbell issued $40,000,000 a 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving Cash of 548,601,480....

Assume the following data for Cable Corporation and Multi-Media Inc. a. Compute the return on stockholders equity

Question:

Net income. Sales......... Total assets........ Total debt....... Stockholders' equity. Cable Corporation $ 31.200 317,000 402,000 163,000 239,000 Multi- Media Inc. $ 140,000 2,700,000 965,000 542,000 423,000

Step by Step Answer:

a MultiMedia Inc has a much higher return on stockholders equity than Cable Corporation b c As previ...View the full answer

Foundations Of Financial Management

Students also viewed these Business questions