Question: PA11-5 (Algo) Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/ 5] Two online magazine companies reported the following in their financial statements: Net

 PA11-5 (Algo) Computing and Interpreting Return on Equity (ROE) and Price/Earnings

PA11-5 (Algo) Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/ 5] Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity Earnings per share Stock price when annual results reported Betterworth 2021 2020 $ 114,500 $ 109,504 632,186 557,814 4.10 4.09 56.65 53.29 Outdoor Fun 2021 2020 $ 96,500 $ 173,073 492, 151 512,049 3.00 4.88 34.80 61.95 Required: 1-a. Compute the 2021 ROE for each company. 1-b. Which company appears to generate greater returns on stockholders' equity in 2021? 2-a. Compute the 2021 P/E ratio for each company. 2-b. Which company do investors appear to value more

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