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Assume the following data for Cable Corporation and Multi-Media Inc.       Cable Corporation Multi-Media Inc. Net...

Assume the following data for Cable Corporation and Multi-Media Inc.   
  

Cable
Corporation		 Multi-Media Inc.
Net income $ 39,800 $ 190,000
Sales 352,000 2,170,000
Total assets 409,000 966,000
Total debt 234,000 545,000
Stockholders' equity 175,000 421,000


a-1. Compute return on stockholders’ equity for both firms. (Input your answers as a percent rounded to 2 decimal places.)
  


a-2. Which firm has the higher return?
  

  • Multi-Media Inc.

  • Cable Corporation



b. Compute the following additional ratios for both firms

Cable Corporation Multi-Media Inc.
Net income/Sales % %
Net income/Total assets % %
Sales/Total assets times times
Debt/Total assets % %
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Answer #1
Cable Multi-Media Inc.
Corporation
Net income 39,800 190,000
Sales 352,000 2,170,000
Total assets 409,000 966,000
Total debt 234,000 545,000
Stockholders' equity 175,000 421,000
a-1 Return on Equity = Net Income/Equity 22.74% 45.13%
a-2 Multi media has higher return
Net Income/Sales 11.3068% 8.7558%
Net Income/Total Assets 9.7311% 19.6687%
Sales/Total Assets 0.860635697 2.246376812
Debt/Total Assets 57.2127% 56.4182%
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