Question
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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Advanced Financial Accounting
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
6th edition
013703038X, 978-0137030385
