Two online magazine companies reported the following in their financial statements: Required: 1. Compute the 2015 ROE
Question:
Required:
1. Compute the 2015 ROE for each company (express ROE as a percentage rounded to one decimal place). Which company appears to generate greater returns on stockholders€™ equity in 2015?
2. Compute the 2015 P/E ratio for each company. Do investors appear to value one company€™s earnings more than the other€™s? Explain.
BusinessWorld 2015 Fun and Games 2014 2015 2014 Net income Total stockholders equity Earnings per share Stock price when annual results reported $110000 $108,604 512,814 3.19 5104 587,186 3.20 5440 91,420 $172,173 467,049 3.98 59.70 447,151 2.10 32.55
Step by Step Answer:
Req 1 The companies appear to generate the same return on equity in 2015 Req 2 Inves...View the full answer
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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