Avery's Rentals, Inc., and Rent-A-Matic, Inc., are two publicly traded rental companies. They reported the following in their 2013 financial statements (in millions of dollars, except per share amounts and share prices):

Required:
1. Compute the 2013 ROE for each company. Express ROE as a percentage rounded to one decimal place. Which company appears to generate greater returns on shareholders' equity in 2013? Remember that the bottom of the ROE ratio uses the average shareholders' equity.
2. Compute the 2013 P/E ratio for each company (rounded to one decimal place). Do investors appear to value one company more than the other? Explain.

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Rent-A-Matic, Inc. Avery's Rentals, Inc. 2013 2012 2012 2013 $ 76.3 947.1 $ 139.6 1,079.2 2.10 19.37 $ 90.2 $ 80.3 673.4 Net income Total shareholders' equity Earnings per share Share price when annual results reported 761.5 1.69 1.48 21.54 1.11 18.35 26.67