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The financial data for Company W1 and Company X1 is provided below: Criteria Company W1 Company X1 Net Income $1,200,000 $980,000 Total Assets $12,000,000 $9,800,000

The financial data for Company W1 and Company X1 is provided below:

Criteria

Company W1

Company X1

Net Income

$1,200,000

$980,000

Total Assets

$12,000,000

$9,800,000

Total Liabilities

$7,000,000

$5,800,000

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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