Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity...

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Two online magazine companies reported the following in their financial statements: Net income Total stockholders equity Ear

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Answer 1

Answer #1

1a) Return on equity

	Return on equity
Business world	106500/515000 = 20.7%
Fun and games	87500/422100 = 20.7%

1b) Both company appears the same return on equity

2a) P/E ratio

	P/E ratio
Business world	52.65/2.30 = 22.9
Fun and games	30.80/1.40 = 22

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Answer 2

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