Assume the following data for Cable Corporation and Multi-Media Incorporated.Net incomeSalesTotal assetsTotal debtStockholders' equityCableCorporation$ 34,400364,000448,000237,000211,000Cable CorporationMulti-Media, Incorporateda. 1. Compute return on stockholders' equity for both firms.Note: Input your answers as a percent rounded to 2 decimal places.Return onStockholders'EquityMulti-MediaIncorporated$ 128,0002,700,000%%970,000468,000502,000 2. Which firm has the higher return?O Cable CorporationO Multi-Media Incorporatedb. Compute the following additional ratios for both firms.Note: Input your Net income/Sales, Net income/Total assets and Debt/Total asset answers as a percent rounded to 2 decimaplaces. Round your Sales/Total assets answers to 2 decimal places.Net income/SalesNet income/Total assetsSales/Total assetsDebt/Total assetsCable Corporation%%times%Multi-Media Incorporated%%times%

Return on Equity: ROE is a measure of profitability used in the ratio analysis of firms. It is…

Answered: a. 1. Compute return on stockholders'…

a. 1. Compute return on stockholders' equity for both firms. Note: Input your answers as a percent rounded to 2 decimal places.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...

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Question

100%

Assume the following data for Cable Corporation and Multi-Media Incorporated.
Net income
Sales
Total assets
Total debt
Stockholders' equity
Cable
Corporation
$ 34,400
364,000
448,000
237,000
211,000
Cable Corporation
Multi-Media, Incorporated
a. 1. Compute return on stockholders' equity for both firms.
Note: Input your answers as a percent rounded to 2 decimal places.
Return on
Stockholders'
Equity
Multi-Media
Incorporated
$ 128,000
2,700,000
%
%
970,000
468,000
502,000

2. Which firm has the higher return?
O Cable Corporation
O Multi-Media Incorporated
b. Compute the following additional ratios for both firms.
Note: Input your Net income/Sales, Net income/Total assets and Debt/Total asset answers as a percent rounded to 2 decima
places. Round your Sales/Total assets answers to 2 decimal places.
Net income/Sales
Net income/Total assets
Sales/Total assets
Debt/Total assets
Cable Corporation
%
%
times
%
Multi-Media Incorporated
%
%
times
%

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