Question
In fiscal year 2017, Intel Corp and Infineon Technologies (direct competitors in the semiconductor business) reported the following select data in their annual financial reports:
In fiscal year 2017, Intel Corp and Infineon Technologies (direct competitors in the semiconductor business) reported the following select data in their annual financial reports:
(Reported in millions)
Intel Infineon
Total Assets 123,249 11,748
Total Equity 69,019 6,657
Total Revenue 62,751 8,343
Net Income 9,601 933
Despite these two companies having very similar return on equity, how they achieved their 2017 ROE is quite different. How?
a) Infineon was less profitable, but relied less on debt.
b) Intel was less profitable, but relied less on debt.
c) Intel used their assets more effectively; Infineon used leverage more efficiently.
d) Intel used their assets more effectively; Infineon was more profitable.
e) Intel was more profitable; Infineon used their assets more effectively.
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