4-5 How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different companies that are being compared? Are only balance sheet items or both balance sheet and income statement items affected? 4-6 If a firm's ROE is low and management wants to improve it, explain how using more debt might help. 4-8 Why is it sometimes misleading to compare a company's finandal ratios with those of other firms that operate in the same industry? 4-9 Suppose you were comparing a discount menchandiser with a high-end menchandiser. Suppose further that both companies had identical ROEs. If you applied the DuPont equation to both firms, would you expect the three components to be the same for each company? If not, explain what balance sheet and income statement items might lead to the component differences. 4-10 Refer to an online finance source such as Yahool Finance or Google Finance to look up the P/E ration for Alphabet linc. (the parent company of Google), and Walmart. Which company has the higher P/E ratio? What factors could explain this? 4-11 Differentiate between ROE and ROMC 4-12. Indicate the effects of the transactions listed in the following table on total current assets, current ratio, and net income. Use (+) to indicate an increase, () to indicate a decrease, and (0) to indicate either no effect of an indeterminate effect. Be prepared to state any necessary assumptions and aseume an initial current ratio of more than 1.0. (Note: A good accounting background is necensary to anwwer some of these questions; if yours is not strong, answer the questions you can.)