There are two companies in the market. Company A in 2022 has generated a revenue of $74,452,000 with a cost $74,132,000. Company B in 2022 has generated a revenue of $12,148,000 with a cost $11,988,000. According to their financial reports, the value of the assets owned by the company A is $40,000,000, including $20,000,000 liabilities. The value of the assets owned by the company B is $30,000,000, including $20,000,000 liabilities. 1) Calculate ROA, ROE, profit margin and asset turnover for company A. 2) Calculate ROA and ROE for company B and decide which company has a better financial performance.
There are two companies in the market. Company A in 2022 has generated a revenue of $74,452,000 with a cost $74,132,000. Company B in 2022 has generated a revenue of $12,148,000 with a cost $11,988,000. According to their financial reports, the value of the assets owned by the company A is $40,000,000, including $20,000,000 liabilities. The value of the assets owned by the company B is $30,000,000, including $20,000,000 liabilities. 1) Calculate ROA, ROE, profit margin and asset turnover for company A. 2) Calculate ROA and ROE for company B and decide which company has a better financial performance.
Chapter11: The Corporate Income Tax
Section: Chapter Questions
Problem 5P: Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of...
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There are two companies in the market. Company A in 2022 has generated a revenue of
$74,452,000 with a cost $74,132,000. Company B in 2022 has generated a revenue of $12,148,000
with a cost $11,988,000. According to their financial reports, the value of the assets owned by the
company A is $40,000,000, including $20,000,000 liabilities. The value of the assets owned by
the company B is $30,000,000, including $20,000,000 liabilities.
1) Calculate ROA, ROE, profit margin and asset turnover for company A.
2) Calculate ROA and ROE for company B and decide which company has a better financial
performance.
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