Question

Po- Yen Devices Inc. and Kejia Computer Ltd. are competing businesses. Selected data from the financial statements for the two companies for the year ended 31 December 20X2 are shown below.



Required:
1. Compute the following ratios for both companies (for convenience, use 20X2 year- end balance sheet amounts instead of averages):
a. Operating margin (i. e., earnings ÷ revenue)
b. Return on assets
c. Return on share equity
d. Total debt- to- shareholder’s equity
2. Evaluate the two companies, based on the ratios you have calculated. Which company do you think is moreprofitable?


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  • CreatedFebruary 17, 2015
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