Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Two online magazine companies reported the following in their financial statements: BetterWorth Outdoor Fun 2021 2020 2021 2020 Net income $ 107,500 $ 108,104 $
Two online magazine companies reported the following in their financial statements:
BetterWorth | Outdoor Fun | |||
---|---|---|---|---|
2021 | 2020 | 2021 | 2020 | |
Net income | $ 107,500 | $ 108,104 | $ 88,500 | $ 171,673 |
Total stockholders' equity | 562,186 | 487,814 | 422,151 | 442,049 |
Earnings per share | 2.70 | 2.69 | 1.60 | 3.48 |
Stock price when annual results reported | 53.65 | 49.79 | 31.30 | 58.45 |
Required:
1-a. Compute the 2021 ROE for each company.
1-b. Which company appears to generate greater returns on stockholders equity in 2021?
2-a. Compute the 2021 P/E ratio for each company.
2-b. Which company do investors appear to value more?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started