Which of the following is not true? Firm A Firm B Industry Benchmark 2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS 1.90 2.10 2.25 1.55 1.65 1.75 1.52 1.55 1.60 A Based on ROA, Firm A is doing better than Firm B and the Industry benchmark. B Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark. C Based on ROE, Firm A is doing better than Firm B and the Industry benchmark. D Based on current ratio, Firm B is doing better than the Industry benchmark.
Which of the following is not true? Firm A Firm B Industry Benchmark 2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS 1.90 2.10 2.25 1.55 1.65 1.75 1.52 1.55 1.60 A Based on ROA, Firm A is doing better than Firm B and the Industry benchmark. B Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark. C Based on ROE, Firm A is doing better than Firm B and the Industry benchmark. D Based on current ratio, Firm B is doing better than the Industry benchmark.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
| Which of the following is not true? | |||||||||
| Firm A Firm B Industry Benchmark | |||||||||
| 2018 | 2019 | 2020 | 2018 | 2019 | 2020 | 2018 | 2019 | 2020 | |
| 9.14% | 9.50% | 9.90% | 8.11% | 8.16% | 8.19% | 8.11% | 8.14% | 8.15% | |
| 22.45% | 22.95% | 23.45% | 19.65% | 19.88% | 20.12% | 19.95% | 20.55% | 21.00% | |
| TIE | 1.75 | 1.65 | 1.55 | 2.75 | 2.90 | 3.05 | 2.25 | 2.30 | 2.50 |
| CR | 3.25 | 3.66 | 3.75 | 2.55 | 2.65 | 2.75 | 2.40 | 1.45 | 2.50 |
| EPS | 1.90 | 2.10 | 2.25 | 1.55 | 1.65 | 1.75 | 1.52 | 1.55 | 1.60 |
| A |
Based on ROA, Firm A is doing better than Firm B and the Industry benchmark. |
|
| B |
Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark. |
|
| C |
Based on ROE, Firm A is doing better than Firm B and the Industry benchmark. |
|
| D |
Based on current ratio, Firm B is doing better than the Industry benchmark. |
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