Two music companies reported the following in their 2014 financial statements (in thousands of dollars, except earnings per share amounts and share prices):

Required
1. Compute the 2014 ROE for each company (express ROE as a percentage rounded to one decimal place). Which company appears to generate greater returns on shareholders' equity in 2014?
2. Compute the 2014 P/E ratio for each company. Do investors appear to value one company more than the other? Explain.
3. Sound Jonx reacquired 5,000 common shares in 2014 at $13 per share. Recalculate the company's ROE for 2014 assuming that this share repurchase did not occur. Does this new ROE change your interpretation of the ROE ratios calculated in requirement 1?

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Urban Youth Sound Jonx 2014 2013 2014 2013 $ 24,302 300,399 $ 27,500 387,101 $ 36,739 521,198 Net income $ 41,500 Tatal shareholders' equity Earnings per share Share price when annual results reported 516,302 0.95 18.50 16.15 1.00 1.10 20.35 0.85 14.45