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%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Can you answer please?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education