Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Which of the two companies, GPS Corporation or Tru, Inc finances a higher percentage of its assets by borrowed funds relative to funds invested

image text in transcribedimage text in transcribed

1. Which of the two companies, GPS Corporation or Tru, Inc finances a higher percentage of its assets by borrowed funds relative to funds invested by shareholders as measured by the debt to equity ratio in 2021?

2. Which of the two companies, GPS Corporation or Tru, Inc., indicates a higher profitability during the period 2017-2021 without regard to the sources of financing as measured by the return on assets ratio?

3. Which of the two companies, GPS Corporation or Tru, Incindicates a higher effectiveness of employing resources provided by owners during the period 2017-2021 as measured by the return on shareholders equity ratio?

4. Management is using its borrowed funds to enhance the earnings for shareholders of (a) GPS Corporation, (b) Tru, Inc., (c) both firms, or (d) neither firm during the period 2017- 2021?

Show work when it necessaire and explain. Thanks

Right click to open image in a new tab to see clearly.

Year Debt to Equity Ratio Trend ($ in 000s) Company / Year (ANI) Null 2012 GPS Tru 2.4 2013 2.2692 2.2049 2.2 2.1084 2.1384 2.0750 2.0777 2014 2015 2016 2017 2018 2019 2.0 1.9807 1.8626 1.8190 1.8219 1.8 2021 1.6 1.4 "Debt to equity ratio' 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 "Rate of Return on Shareholders" (S in 000s) Company / Year GPS 2019 Tru 2019 2017 2018 2020 2021 2017 2018 2020 2021 0.34 0.32 31.34% 30.29% 0.30 0.28 27.2696 27.17% 0.26 0.24 22.42% 0.22 0.20 19.36% 18.599 18.28% 0.18 alue 16.21% 0.16 0.14 12.61% 0.12 0.10 9.5% 9.7% 9.6% 8.8% 8.09 0.08 6.0% 5.9% 5.9% 0.06 5.4% 4.5% 0.04 0.02 0.00 "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of "Rate of """" """"Rate of "Rate of return return return returno. return.. return o.. return.. return o.. return.. return o.. return.. return o.. return.. return o.. return.. return o.. return.. return... return.. return o

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

10th edition

1260481956, 1260310175, 978-1260481952

More Books

Students also viewed these Finance questions