Question
Consider the financial information for Company Y1 and Company Z1: Criteria Company Y1 Company Z1 Net Income $1,300,000 $1,050,000 Total Assets $13,000,000 $10,500,000 Total Liabilities
Consider the financial information for Company Y1 and Company Z1:
Criteria | Company Y1 | Company Z1 |
Net Income | $1,300,000 | $1,050,000 |
Total Assets | $13,000,000 | $10,500,000 |
Total Liabilities | $7,500,000 | $6,200,000 |
a) Calculate the return on assets (ROA) for both companies. b) Analyze which company appears to be more efficient in generating profits relative to its assets.
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Accounting Principles
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
IFRS global edition
1-119-41959-4, 470534796, 9780470534793, 9781119419594 , 978-1119419617
