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Buy Now and Gerald's EZ Furniture are two publicly traded rental companies. They reported the following in their financial statements (in millions of dollars, except
Buy Now and Gerald's EZ Furniture are two publicly traded rental companies. They reported the following in their financial statements (in millions of dollars, except per-share amounts and stock prices): Buy Now 2016 2015 $ 118 $ 170 1,115 1,162 1.56 2.25 Net income Total stockholders' equity Earnings per share Stock price when annual results reported $ Gerald's EZ Furniture 2016 2015 125 $ 179 1,316 1,300 2.31 3.05 26.82 29.37 29.72 35.13 Required: 1-a. Compute the 2016 ROE for each company. Express ROE as a percentage. TIP: Remember that the bottom of the ROE ratio uses the average stockholders' equity. 1-b. Which company appears to generate greater returns on stockholders' equity in 2016? 2-a. Compute the 2016 P/E ratio for each company. 2-b. Which company do investors appear to value more? Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Compute the 2016 ROE for each company. Express ROE as a percentage. TIP: Remember that the bottom of the ROE ratio uses the average stockholders' equity. (Do not round your intermediate calculations. Round your answers to 1 decimal place.) ROE Buy Now Gerald's EZ Furniture Req 1A Reg 1B Req 2A Req 2B Which company appears to generate greater returns on stockholders' equity in 2016? O Buy Now Gerald's EZ Furniture Req 1A Req 1B Req 2A Req 2B Compute the 2016 P/E ratio for each company. (Round your answers to 1 decimal place.) P/E times Buy Now Gerald's EZ Furniture times Req 1A Req 1B Req 2A Req 2B Which company do investors appear to value more? IO Buy Now O Gerald's EZ Furniture
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