Acme Transportation Company has the following ratios compared to its industry for 2015. Explain, with supporting calculations,

Question:

Acme Transportation Company has the following ratios compared to its industry for 2015.

Acme Transportation Industry Return on assets Return on equity 9% 6% 12% 24%

Explain, with supporting calculations, why the return-on-equity ratio is so much less favourable than the return-on-assets ratio, compared to the industry.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

See More Books

Question Posted: Sep 08, 2018 12:34 PM

See More Questions

Front Beam Lighting Company has the following ratios compared to its industry for 2013. Explain why the return-on-equity ratio is so much less favorable than the return-on-assets ratio compared to...
Global Healthcare Products has the following ratios compared to its industry for 2015. Explain, with supporting calculations, why the return-on-assets ratio is so much more favourable than the...
AllState Trucking Co. has the following ratios compared to its industry for 2013. Explain why the return-on-assets ratio is so much more favorable than the return-on-sales ratio compared to the...
1. Consider the market for local rides (taxis, Uber Lyft, and so on), which is highly competitive. Suppose that the market is initially unregulated, but that the government imposes a binding price...
Preparing journal entries for merchandising activities-perpetual system July 1 Purchased merchandise from Borden Company for $6,700 under credit terms of 2/15, n/30, FOB shipping point, invoice dated...
Given that the ionization energy of F2- is 290. kJ/mol, do the following. a. Calculate the bond energy of F2-. You will need to look up the bond energy of F2 and ionization energy of F2. b. Explain...
Determine in which direction the current loop rotates $(a)$ in Figure $28.21 c$ and $(b)$ in Figure 28. 21d. Data from Figure 28. 21 (a) ! 21 (e) (d) (2)
Purchase Commitments at December 31, 2011, Volkan Company has outstanding non-cancelable purchase commitments for 40,000 gallons, at $3.00 per gallon, of raw material to be used in its manufacturing...
25 25 A piece of wire of resistance R is cut into three equal parts. These parts are then connected in parallel. If the equivalent resistance of this parallel combination is R, what is the value of...
Following are a series of cost behavior graphs. The total cost is shown on the vertical (y) axis and the volume (activity) is shown on the horizontal (x) axis. For each of the following situations,...
Sharpe Razor Company has total assets of $2,500,000 and current assets of $1,000,000. It turns over its capital assets five times a year and has $700,000 of total debt. Its return on sales is 3...
Using the DuPont method, evaluate the effects of the following relationships for the Lollar Corporation. a. Lollar Corporation has a profit margin of 5 percent and its ROA (investment) is 13.5...
Microsoft offers free licenses of certain software products to students at colleges and universities that participate in its DreamSpark program [formerly known as the Microsoft Developer Network...
Holding period and annual (investment) returns. Bohenick Classic Automobiles restores and rebuilds old classic cars. The company purchased and restored a classic 1957 Thunderbird convertible 5 years...
the policy at pina colada corp is to expense all office supplies at the time of purchase on the last day of the accounting period there are 1210 of unused office supplies on hand and the balance of...
Shiny Kitchen Inc. and Juicello Corp. are two competitors in the electric juicer market. The cost incurred by each company to manufacture juicers is $75 per unit. Although both the companies sell...
Create a welcoming message to an individual that completed Pre-Med and worked in an operating room, but now seeking work opportunity in an emergency room.
Check whether the following sets form subspace or not. (i) S={(x,x,x)=R | x-4x+5x=2} in the vector space R. (ii) S={(x,x)=R | y=x] in the vector space IR. (iii) S={AEM22 | det(A) = 0) in the vector...
Using the results in Exercise 1, test the hypothesis that the slope on x 1 is 0 by running the restricted regression and comparing the two sums of squared deviations. Test the hypothesis that the two...
How will relating product contribution margin s to the amount of the constrained resource they consume help a company maximize its profits?
OReilly Moving Company has a $1,000 par value convertible bond outstanding that can be converted into 20 shares of common stock . The common stock is currently selling for $43.10 a share, and the...
The bonds of Goniff Bank & Trust have a conversion premium of $90. Their conversion price is $20. The common stock price is $16.50. What is the price of the convertible bonds? Discuss.
The bonds of Generic Labs Inc. have a conversion premium of $70. Their conversion price is $25. The common stock price is $22.50. What is the price of the convertible bond?
Of 15,000 individuals aged 18 years living in Ontario, 5,000 visited their family doctor in the past year and of these individuals 1,875 were diagnosed with lifelong depression. Assuming everyone was...
If A = 9 3 -5 -8 -7 01-87 2 00-765 000-4 3 0 0 0 0 -9 then det (A) =
To improve the effectiveness of its teaching staff, the administration of a high school offered the opportunity for all teachers to participate in a workshop. They were not required to attend;...

Acme Transportation Company has the following ratios compared to its industry for 2015. Explain, with supporting calculations,

Question:

Acme Transportation Industry Return on assets Return on equity 9% 6% 12% 24%

Step by Step Answer:

Acme Transportation Company Acme Transportat...View the full answer

Foundations of Financial Management

Students also viewed these Business questions