Two online magazine companies reported the following in their financial statements: Required: 1. Compute the 2018 ROE
Question:
Two online magazine companies reported the following in their financial statements:
Required:
1. Compute the 2018 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 2018?
2. Compute the 2018 P/E ratio for each company. Do investors appear to value one company’s earnings more than the other’s? Explain.
BusinessWorld Fun and Games 2018 2017 2018 2017 $ 91,420 447,151 $110,000 $108,604 $172,173 467,049 Net income Total stockholders' equity 587,186 512,814 Earnings per share Stock price when annual results reported 3.20 3.19 2.10 3.98 54.40 51.04 32.55 59.70
Step by Step Answer:
Req1 Req2 Stockholders EquityDecember 31 a Cash b Cash C Cash d Cash Assets 550000...View the full answer
Fundamentals Of Financial Accounting
ISBN: 9781265440169
7th Edition
Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Business questions
-
Two online magazine companies reported the following in their financial statements: Required: 1. Compute the 2015 ROE for each company (express ROE as a percentage rounded to one decimal place)....
-
Two magazine companies reported the following in their 2014 financial statements (in thousands of dollars, except earnings per share amounts and share prices) Required: 1. Compute the 2014 ROE for...
-
Two music companies reported the following in their 2012 financial statements: Required: 1. Compute the 2012 ROE for each company (express ROE as a percentage rounded to one decimal place). Which...
-
Locate the centroid of the region bounded by the given curves. about x = 5, y = 2x2, y = 0, x = 5 < UseHorizontal ElementOf Area > x = 5 y = 2x? y = 0
-
Repeat the previous problem for a cylinder (cannon) pointing 40 degrees up relative to the horizontal direction.
-
What is instant messaging (IM), and how can it support business operations? Which technology does IM replace or augment in online retailing?
-
What are the two possible translation processes that may be necessary to translate a foreign operations financial statements?
-
Moms Bakery makes a variety of baked goods for distribution to grocery stores in the area. The company uses a standard manufacturing process for all items except special-order birthday cakes. It...
-
Malimali Fish Products Ltd, A Malindi-based firm dealing in fish products, conducts training programmes for all its line managers. The managers ar expected to master, in particular, procedures in...
-
a. Determine VL, IL, IZ, and IR for the network Fig. 2.181 if RL = 180 Ω. b. Repeat part (a) if RL = 470 H. c. Determine the value of RL, that will establish maximum power conditions for...
-
Two music companies reported the following in their financial statements: Required: 1. Compute the 2018 ROE for each company (express ROE as a percentage rounded to one decimal place). Which company...
-
Delta Air Lines, Inc., and Southwest Airlines Co. are two publicly traded airline companies. They reported the following in their financial statements (in millions of dollars, except per-share...
-
Instagram is a businesss visual shop on mobile, and were seeing more people seek out businesses there, said Sheryl Sandberg, Facebooks chief operating officer. What types of brands lend themselves to...
-
Explain the famous Kantian dictum: Thoughts without content are empty, intuitions without concepts are blind. Explain the notion that our a priori concepts are the source of a powerful illusionthe...
-
In what ways is he different How does Socrates proceed in his examination of his fellow citizens? is the connection between dialectic and truth?
-
Total assets of a firm is Rs. 8,40,000. The liabilities of the firm is Rs. 4,40,000. Normal rate of return in this class of business is 12 1/2%. The firm earned a profit of 2 Rs. 64,000. Calculate...
-
Two and one half years from now Melanie Olson wants to have $8,500 in the bank. She can earn insterest of 12% compounded monthly. Compute the amount that Millatti must deposit today.
-
A person running a hedge fund and are long a portfolio of Mortgage-Backed securities with a market value of $100 million and an average effective duration of 3 and short a portfolio of treasury bonds...
-
Given the following Z-matrix (where the semicolons are used to denote the end of a row), draw a Newman projection of the molecule. C1; C2 1 1.5; F3 1 1.4 2 109.5; Cl4 2 1.8 1 120.0 3 0.0; H5 1 1.1 2...
-
The Strahler Stream Order System ranks streams based on the number of tributaries that have merged. It is a top-down system where rivers of the first order are the headwaters (aka outermost...
-
Using the information in M6-13, calculate the gross profit percentage (rounded to one decimal place). How has Sellall performed, relative to the gross profit percentages reported for Walmart in the...
-
Luxottica Group, the Italian company that sells Ray Ban and Oakley sunglasses, reported net sales of 7.1 billion in 2012 and 6.2 billion in 2011. Gross profit increased from 4.1 billion in 2011 to...
-
Fortune Brands Home & Security, Inc., sells Master Lock padlocks. It reported an increase in net sales from $ 3.3 billion in 2011 to $ 3.6 billion in 2012, and an increase in gross profit from $ 1.0...
-
Objectives: Your company is currently planning to automate many different system administration tasks. Your manager has asked you to research a system administration task and implement it using...
-
RELATIONAL DATABASE CONCEPTS: Describe the basic steps required to install the Oracle, SQL Server, and MySQL relational database management systems (RDBMSs) and the major challenges that the user may...
-
Defend the following statement: Data and database administration are even more important in the decentralized IS environment than in the centralized one
Study smarter with the SolutionInn App