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

a. Compute return on stockholders€™ equity for both firms using ROE-ratio Net income / stockholders€™ equity. Which firm has the higher return?
b. Compute the following additional ratios for both firms:
c. Discuss the factors from part b. above that added or detracted from one firm having a higher return on stockholders€™ equity than the other firm as computed in part a.above.

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Cable Corp Multi-Media, Inc 100,000 S 300,000 S 2,000,000 S 400,000 S 900,000 S 150,000 450,000 S 250,000 S50,000 S Net income Sales Total assets Total debt- Stockholders' equity 30,000 S