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PA11-5 Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/E) Ratios (LO 11-5) Two online magazine companies reported the following in their financial statements:

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PA11-5 Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/E) Ratios (LO 11-5) Two online magazine companies reported the following in their financial statements: Net Income Total stockholders' equity Earnings per share Stock price when annual results reported Betterworth 2018 2017 $114,000 $109,404 627,186 552,814 4.00 3.99 56.40 53.04 Outdoor Fun 2018 2017 $ 96,000 $172,973 487, 151 507,049 2.90 4.78 34.55 61.70 Required: 1-a. Compute the 2018 ROE for each company 1-b. Which company appears to generate greater returns on stockholders' equity in 2018? 2-a. Compute the 2018 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. Reg 1A Reg 1B Req 2A Reg 28 Compute the 2018 ROE for each company. (Round your answers to 1 decimal place.) ROE 18.2% Better Worth Outdoor Fun 19.7% PA11-5 Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/E) Ratios (LO 11-5) Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity Earnings per share Stock price when annual results reported Betterworth 2018 2017 $114,000 $109,404 627,186 552,814 4.00 3.99 56.40 53.04 Outdoor Fun 2018 2017 $ 96,000 $172,973 487, 151 507,049 2.90 4.78 34.55 61.70 Required: 1-a. Compute the 2018 ROE for each company. 1-b. Which company appears to generate greater returns on stockholders' equity in 2018? 2-a. Compute the 2018 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. 25 Reg 1A Reg 1B Reg 2A Reg 28 Which company appears to generate greater returns on stockholders' equity in 2018? O Better Worth Outdoor Fun Both Companies appear to generate the same return on equity PA11-5 Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/E) Ratios (LO 11-5) Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity Earnings per share Stock price when annual results reported Betterworth 2018 2017 $114,000 $109,404 627,186 552,814 4.00 3.99 56.40 53.04 Outdoor Fun 2018 2017 $ 96,000 $172,973 487, 151 507,049 2.90 4.78 34.55 61.70 Required: 1-a. Compute the 2018 ROE for each company. 1-b. Which company appears to generate greater returns on stockholders' equity in 2018? 2-a. Compute the 2018 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 Reg 2A Reg 28 which company do investors appear to value more? O BetterWorth O Outdoor Fun Both companies appear to generate the same P/E ratio

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