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Please answer a and b and explain why this is wrong. Computing Return on Equity and Return on Assets The following table contains financial statement
Please answer a and b and explain why this is wrong.
Computing Return on Equity and Return on Assets The following table contains financial statement information for Staples, Inc. ($ millions) Total Assets Net Income Sales Equity 2006 $8,397 $974 $18,161 $5,022 2005 7,733 784 16,079 4,482 2004 7,071 665 14,448 4,115 (a) Compute the return on equity (ROE) for 2006 and 2005. (Round your answers to one decimal place.) 2006 ROE = 19.4 x % 2005 ROE = 17.5 * % What trend, if any, is evident? How does Staple's ROE compare with the approximately 12% median ROE for publically traded companies? OStaple's ROE decreased from 2005 to 2006 and is similar to the median for other publically traded companies. Staple's ROE increased from 2005 to 2006 and is well above the median for other publically traded companies. OStaple's ROE increased from 2005 to 2006 and is similar to the median for other publically traded companies. Staple's ROE decreased from 2005 to 2006 but still exceeds the median for other publically traded companies. Mark 1.00 out of 1.00 (b) Compute the return on assets (ROA) for 2006 and 2005. (Round your answers to one decimal place.) 2006 ROA = 11.6 * % 2005 ROA = 10.1 * %Step by Step Solution
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