The following table shows data for C Inc. Current Year Next Year Forecast Total Assets 200,000 220,000
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Question:
The following table shows data for C Inc.
| Current Year | Next Year Forecast | |
|---|---|---|
| Total Assets | 200,000 | 220,000 |
| Equity Multiplier | 1.8 | 1.8 |
| Revenues | 300,000 | 330,000 |
| Net Profit | 24,000 | 33,000 |
Forecasts for a competitor company X Inc. expect it to achieve asset turnover of 1.5x, equity multiplier of 1.5x, and profit margin of 12.0%. Just based on ROE expectations, which company would be preferred by investors and why?
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