. Use financial statement information from the Companies Rex Co. and Ready Co. to answer Q4a & Q4b.

Rex Co. Ready Co. Interest Expense $4,000 $8,000 Tax Expense 16,000 22,000 Net Income 60,000 120,000 Average Assets 600,000 450,000 Average Equity 300,000 150,000

4a. Calculate Return on Equity [ROE], Leverage and Times Interest Earned [TIE] for Rex Co, and Ready Co. [1 mark]

Show plausible calculations to get credit Rex Co Ready Co ROE = ROE Leverage = Leverage TIE = TIE

4b. Evaluate their relative performance given that they compete in same market. [1 marks]