Homework Help is Here – Start Your Trial Now!
Business
Accounting
For the current year, Company A had sales of $350,000, net income of $250,000, and average common Stockholders' Equity of $900,000. During the same year, Company B had sales of $210,000 net income of $180,000, and average common Stockholders' Equity of $440,000. Which of the following statements is TRUE regarding this situation?. A. Company A has a better return on equity, $250,000 compared to Company B's $180,000. B. Company B has a better return on equity, 40.91% compared to Company A's 27.78%. C. Company A has a better return on equity, $350,000 compared to Company B's $210,000 D. Company B has a better return on equity, 85.71% compared to Company A's 71.43%.

For the current year, Company A had sales of $350,000, net income of $250,000, and average common Stockholders' Equity of $900,000. During the same year, Company B had sales of $210,000 net income of $180,000, and average common Stockholders' Equity of $440,000. Which of the following statements is TRUE regarding this situation?. A. Company A has a better return on equity, $250,000 compared to Company B's $180,000. B. Company B has a better return on equity, 40.91% compared to Company A's 27.78%. C. Company A has a better return on equity, $350,000 compared to Company B's $210,000 D. Company B has a better return on equity, 85.71% compared to Company A's 71.43%.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 88PSA: Ratio Analysis Consider the following information taken from the stockholders equity section: How do...
See similar textbooks
icon
Related questions
Question

Provide answer this question

For the current year, Company A had sales of $350,000, net income of $250,000, and average common Stockholders' Equity of $900,000. During the same year, Company B had sales of $210,000 net income of $180,000, and average common Stockholders' Equity of $440,000. Which of the following statements is TRUE regarding this situation?. A. Company A has a better return on equity, $250,000 compared to Company B's $180,000. B. Company B has a better return on equity, 40.91% compared to Company A's 27.78%. C. Company A has a better return on equity, $350,000 compared to Company B's $210,000 D. Company B has a better return on equity, 85.71% compared to Company A's 71.43%.
Transcribed Image Text:For the current year, Company A had sales of $350,000, net income of $250,000, and average common Stockholders' Equity of $900,000. During the same year, Company B had sales of $210,000 net income of $180,000, and average common Stockholders' Equity of $440,000. Which of the following statements is TRUE regarding this situation?. A. Company A has a better return on equity, $250,000 compared to Company B's $180,000. B. Company B has a better return on equity, 40.91% compared to Company A's 27.78%. C. Company A has a better return on equity, $350,000 compared to Company B's $210,000 D. Company B has a better return on equity, 85.71% compared to Company A's 71.43%.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SEE MORE TEXTBOOKS