Question: The following data show four items from the financial statements of two companies for a recent year (amounts in millions of US$): a. Compute the

The following data show four items from the financial statements of two companies for a recent year (amounts in millions of US$):

a. Compute the rate of return on assets for each company and disaggregate ROA into profit margin and total assets turnover components.
b. Compute the rate of return on equity for each company and disaggregate ROE into
profit margin, total assets turnover, and capital structure leverage components.
c. The two companies are a developer and manufacturer of semiconductors and a telecommunication service company. Which of the companies corresponds to A and B?
What clues did you use in reaching yourconclusions?

Company A CompanyB For Year $38,334 6,986 $93,469 6,999 Net Income. Average During Year 52,010 39,757 187,882 49,558

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a Return Total Assets on Assets Profit Margin X Turnover Company A X 134 182 X 074 Company B X 37 75 ... View full answer

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