ABC Corp and XYZ Technologies (direct competitors) reported the following select data in their annual financial reports: ABC XYZ Total Assets 123,249 11,748 Total Equity 69,019 6,657 Total Revenue 62,751 8,343 Net Income 9,601 933 Despite these two companies having very similar ROE how they achieved their ROE is quite different. How? a) XYZ was less profitable, but relied less on debt. b) ABC was less profitable, but relied less on debt. c) ABC used their assets more effectively; XYZ used leverage more efficiently. d) ABC used their assets more effectively; XYZ was more profitable. e) ABC was more profitable; XYZ used their assets more effectively.
ABC Corp and XYZ Technologies (direct competitors) reported the following select data in their annual financial reports: ABC XYZ Total Assets 123,249 11,748 Total Equity 69,019 6,657 Total Revenue 62,751 8,343 Net Income 9,601 933 Despite these two companies having very similar ROE how they achieved their ROE is quite different. How? a) XYZ was less profitable, but relied less on debt. b) ABC was less profitable, but relied less on debt. c) ABC used their assets more effectively; XYZ used leverage more efficiently. d) ABC used their assets more effectively; XYZ was more profitable. e) ABC was more profitable; XYZ used their assets more effectively.
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 15SP
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Question
ABC Corp and XYZ Technologies (direct competitors) reported the following select data in their annual financial reports:
|
|
ABC |
XYZ |
|
Total Assets |
123,249 |
11,748 |
|
Total Equity |
69,019 |
6,657 |
|
Total Revenue |
62,751 |
8,343 |
|
Net Income |
9,601 |
933 |
Despite these two companies having very similar ROE how they achieved their ROE is quite different. How?
- a) XYZ was less profitable, but relied less on debt.
- b) ABC was less profitable, but relied less on debt.
- c) ABC used their assets more effectively; XYZ used leverage more efficiently.
- d) ABC used their assets more effectively; XYZ was more profitable.
- e) ABC was more profitable; XYZ used their assets more effectively.
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