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The following information was drawn from the Year 5 balance sheets of two companies: Company Butler Lynch Assets 420,000 600,000 Liabilities + Common Stock +

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The following information was drawn from the Year 5 balance sheets of two companies: Company Butler Lynch Assets 420,000 600,000 Liabilities + Common Stock + Retained Earnings 105,000 200,000 115,000 240,000 + 100,000 + 260,000 - During Year 5, Butler's net income was $25,200, while Lynch's net income was $43,200. Required a. Compute the return-on-equity ratio to measure the level of financial risk of both companies. Company Return on Equity Ratio Butler Lynch

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