The following data are available for two companies, Apple and Oracle, all stated in thousands of dollars.

(a) Calculate each company€™s return on equity (ROE) and return on assets (ROA).
(b) Which company has performed better in terms of profitability?
(c) If the two companies were combined (merged), what would be the impact on the results on ROE? Under what conditions would such a combination make sense?

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Apple Oracle Description $42,905,000 $23,253,000 Total revenue Earnings before 12,066,000 8,464,000 interest and taxes Interest expenses 630,000 12,066,000 Earnings before tax 7,834,000 Taxes at 40% 3,831,000 2,241,000 Earnings after tax (net income) 8,235,000 5,593,000 $15,861,000 $22,326,000 Debt $25,090,000 Equity 31,640,000