Answer the 4 questions below based on the following information. Taxes are 35% and all dollars are in millions.

Suunto Inc. Runrun Corp.

Earnings before interest and taxes $280 $294

Debt (at 10% interest) $140 $840

Equity $560 $210

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

2. Why is Runrun's ROE so much higher than Suunto's? Does this mean Runrun is a better company? Why or why not?

3. Why is Suunto's ROA higher than Runrun's? What does this tell you about the two companies?

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