The 2014 financial statements of Chase Company and Conor Company showed the following
Chase Conor
Net sales revenue $150,000 $200,000
Profit Margin 6% 5%
Total average assets $40,000 $80,000
Financial leverage % -5% +6.5%
Interest expense (net of tax) $1,000 $800
a. For each company calculate the following items:
i. Net income
ii. Return on assets
iii. Return on equity
iv. Average stockholders' equity
b. Assuming that both Chase and Conor are in the same industry, which company appears to be the better investment and why?