Compute return on stockholders equity for both firms which


ssume the following data for Cable Corporation and Multi-Media Inc. Cable Corporation Multi-Media Inc. Net income $ 39,900 $ 112,000 Sales 310,000 2,550,000 Total assets 480,000 937,000 Total debt 187,000 538,000 Stockholders' equity 293,000 399,000

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. (Input your Net income/Sales, Net income/Total assets and Debt/Total asset answers as a percent rounded to 2 decimal places. Round your Sales/Total assets answers to 2 decimal places.)

Difficulty: IntermediateLearning Objective: 03-03 The Du Pont system of analysis identifies the true sources of return on assets and return to stockholders.

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Financial Management: Compute return on stockholders equity for both firms which
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