The numbers for Faulty Company and Benchmark Company for the year 2012 are as follows:

1. Compute return on equity, return on sales, asset turnover, and the assets-to-equity ratio for both Faulty and Benchmark.
2. Briefly explain why Faulty€™s return on equity is lower thanBenchmark€™s.

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Faulty Benchmark $ 500 2,740 6,100 6,300 11,730 3,910 45,000 32,100 4,200 7,760 $ 140 Cash Accounts receivable 900 2,200 1,800 3,780 1,260 12,000 7,650 1,300 2,940 Inventory Property, plant, and equipment. Total liabilities Stockholders' equity Sales Cost of goods sold Wage expense Other expenses. Net income 110 940