Huckleberry Finn was an analyst with Twain Investments. He was analyzing two comparable companies in the Twilight industry: Alpha Corporation and Beta Corporation. The two companies had very similar earnings growth prospects, both paid no dividends, and both had identical net income and ROE. Alpha was somewhat larger in terms of sales revenue and assets. However, Alpha had a much lower P/E ratio than Beta, which resulted in a lower market value for Alpha than Beta. Huckleberry was puzzled how two companies with identical net income, dividend payout, and growth prospects could have significantly different market valuations, and he was wondering whether Alpha presented a more attractive investment proposition compared to Beta. Abridged financial statements of Alpha and Beta Corporation are provided below ($ millions):

Required:
Please advise Huckleberry using the financial statement information provided. Please be specific in your answer and back it up with appropriate ratioanalysis.

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INCOME STATEMENTS BALANCE SHEETS 2012 (Average 2011 & 2012) Alpha Beta $1,000 $700 100 600 100 500 700 $600 Alpha Beta Operating revenue. $2,400 $2,160 2,280 2,052 108 Operating assets Operating liabilities. Net operating assets Net financial obligations200 Equity Operating expense Operating income 300 700 Net financial expense Net income 120 20 100 $ 100 500