Question: to two decimal places PA11-5 Computing and Interpreting Return on Equity (ROE) and Tmo onlinc magazine companies reported the following in their financial statements: LO

 to two decimal places PA11-5 Computing and Interpreting Return on Equity

to two decimal places PA11-5 Computing and Interpreting Return on Equity (ROE) and Tmo onlinc magazine companies reported the following in their financial statements: LO 11-5 Price/Earnings (PVE) Ratios BusinessWorld Fun and Games 2015 2014 2015 2014 $110,000 $108,604 91,420 $172,173 447,151 467,049 Net income Total stockholders' equity Eanings per share Stock price when annual results reparted 587,186 3.20 54.40 512,814 3.19 51.04 2.10 32.55 3.98 59.70 Required: I. Compuste the 2015 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 2015? 2. Compute the 2015 P/E ratio for each company. Do investors appear to value one company's eamings more than the other's? Explain

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