Shown below is the liabilities and stockholders equity section of the balance sheet for Sweet Company and Pharoah Company. Each has assets totaling $4,063,000.

Sweet Co.				PharoahCo.
Current liabilities		$291,000		Current liabilities		$641,000
Long-term debt, 9%		1,210,000		Common stock ($20 par)		2,780,000
Common stock ($20 par)		1,920,000		Retained earnings (Cash dividends, $328,000)		642,000
Retained earnings (Cash dividends, $209,000)		642,000
		$4,063,000				$4,063,000

For the year, each company has earned the same income before interest and taxes.

		Sweet Co.		Pharoah Co.
Income before interest and taxes		$1,080,000		$1,080,000
Interest expense		108,900		0
		971,100		1,080,000
Income taxes (20%)		194,220		216,000
Net income		$776,880		$864,000

At year-end, the market price of Sweets stock was $101 per share, and Pharoahs was $63.50. Assume balance sheet amounts are representative for the entire year. (a) Calculate the return on total assets? (Round answers to 2 decimal places, e.g. 16.85%.)

		Return on total assets
Sweet Company			%
Pharoah Company			%

Which company is more profitable in terms of return on total assets? Sweet CompanyPharoah Company (b) Calculate the return on common stock equity? (Round answers to 2 decimal places, e.g. 16.85%.)

		Return on common stock equity
Sweet Company			%
Pharoah Company			%

Which company is more profitable in terms of return on common stockholders equity? Sweet CompanyPharoah Company (c) Calculate the Net income per share. (Round answers to 2 decimal places, e.g. $6.85.)

		Net income per share
Sweet Company		$
Pharoah Company		$

Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the year. Sweet CompanyPharoah Company (d1) From the point of view of net income, is it advantageous to the stockholders of Sweet Co. to have the long-term debt outstanding? NoYes (e) What is the book value per share for each company? (Round answers to 2 decimal places, e.g. $6.85.)

		Book value per share
Sweet Company		$
Pharoah Company		$