The following information was obtained from the 2015 financial reports of Hathaway Toy Company and Yakima Manufacturing:

Assume that the only change to shareholders’ equity during 2015 is due to net income earned in 2015.

REQUIRED:
a. Which company is more effective at managing the capital provided by the owners?
b. Which company is more effective at managing capital provided by all investors?
c. Compute the earnings per share for each company.
d. Is Yakima manufacturing using its debt effectively for the equityowners?

Transcribed Image Text:

Hathaway Toy Interest expense Net income Current liabilities Mortgage payable Common stock ($10 par value) Additional paid-in capital Retained earnings Yakima Mfg S 195,000 755,000 25,000 1,850,000 350,000 150,000 325,000 $2,700,000 $875,000 240,000 800,00 915,000 745,000 Total liabilities and shareholders' equity $2,700,000