Question
You are evaluating the return on assets (ROA) of two companies, Company A and Company B, for the fiscal year 2023. Company Net Income (in
You are evaluating the return on assets (ROA) of two companies, Company A and Company B, for the fiscal year 2023.
Company | Net Income (in millions) | Total Assets (in millions) |
Company A | $40 | $400 |
Company B | $60 | $600 |
Requirements:
- Calculate the return on assets (ROA) for both Company A and Company B.
- Compare the profitability of Company A and Company B based on their ROA values.
- Discuss potential reasons for any differences observed in ROA between Company A and Company B.
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Financial and Managerial Accounting Information for Decisions
Authors: John Wild, Ken Shaw, Barbara Chiappetta
5th edition
978-1259317552, 1259317552, 978-0078025600, 78025605, 978-1259335013, 1259335011, 978-1259347641
