The following financial information (in millions) is for two major corporations for three fiscal years ended December
Question:
The following financial information (in millions) is for two major corporations for three fiscal years ended December 31 as follows:
Instructions
a. Calculate return on assets and return on equity for each company for 2017 and 2016. Comment on whether their ratios have improved or deteriorated.
b. Compare Canadian Pacific?s ratios with Canadian National?s.
c. The five-year industry average for return on equity is 21.74%. Compare the two companies? performance with the industry average.
Taking It Further
Using your findings in this question to illustrate, explain why it is important to use comparisons in evaluating ratios.
Step by Step Answer:
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak