The following data show four items from the financial statements of two companies for a recent year

Question:

The following data show four items from the financial statements of two companies for a recent year (amounts in millions of US$):

a. Compute the rate of return on assets for each company and disaggregate ROA into profit margin and total assets turnover components.
b. Compute the rate of return on equity for each company and disaggregate ROE into
profit margin, total assets turnover, and capital structure leverage components.
c. The two companies are a developer and manufacturer of semiconductors and a telecommunication service company. Which of the companies corresponds to A and B?
What clues did you use in reaching yourconclusions?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...