Question

What follows are the liabilities and shareholders’ equity sections of the balance sheets for Kao Corp. and Bennington Corp. Each has assets totalling $4.2 million.
At year end, the market price of Kao’s shares was $101 per share; it was $63.50 for Bennington’s.
Instructions
(a). Which company is more profitable in terms of return on total assets?
(b). Which company is more profitable in terms of return on shareholders’ equity?
(c). Which company has the greater net income per share? Neither company issued or reacquired shares during the year.
(d). From the point of view of income, is it advantageous to Kao’s shareholders to have the long-term debt outstanding? Why or why not?
e) What is each company’s price earnings ratio?
(f). What is the book value per share for each company?


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  • CreatedAugust 23, 2015
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