Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

17BP_a

Expert-verified
Foundations Of Financial Management
Found in: Page 80
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Assume the following data for Cable Corporation and Multi-Media Inc.

Capable corporation

Muli-media inc

Net income

$31,200

$140,000

Sales

317,000

2,700,000

Total assets

402,000

965,000

Total debts

163,000

542,000

Stockholder’s equity

239,000

423,000

Compute the return on stockholders’ equity for both firms using Ratio 3a. Which firm has the higher return?

Return on stockholder’s equity of Capable corporation is 13.05% and Multimedi Inc. is 33.10%.

Hence, the Return on stockholder’s equity of Multimedia Inc is more than that of the capable corporation.

See the step by step solution

Step by Step Solution

Return on stockholder’s equity of capable corporation

Return on stockholder’s equity of Multimedia Inc.

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.