Answered: Company Profit Margin Aset Turnover…

Company Profit Margin Aset Turnover Total Assets Total Equlty (tImes) (millions) (%) (millions) A 12% 0.5 $12,510 $4,500 B 5.6% 1.6 $6,890 $3,250 7% 1.3 $7,791 $4,900 D 10% 0.8 $10,368 $7,200

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

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Question

The table that follows summarizes the financial performances of four companies in the year 2012. From the given information, which company generated the highest return on equity?

(a) Company A
(b) Company B
(c) Company C
(d) Company D

Company Profit Margin Aset Turnover Total Assets Total Equlty
(tImes)
(millions)
(%)
(millions)
A
12%
0.5
$12,510
$4,500
B
5.6%
1.6
$6,890
$3,250
7%
1.3
$7,791
$4,900
D
10%
0.8
$10,368
$7,200

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