1 AAPL has lower ROE than CSCO. Both companies have very similar ROA. Which of the following much be true?
a) AAPL has lower debt to total asset than CSCO.
b) AAPL is better at managing assets than CSCO
c) AAPL has higher debt to equity than CSCO.
d) AAPL has lower debt to equity than CSCO.
2) CrazyBoy Burger Inc. has total assets at the end of last year were $415,000 and its net income was $32,750. What was its return on total assets?
a) 7.89%
b)8.70%
c) 8.29%
d) 9.14%
e) 9.59%
ZAG makes protective gears for personal devices, has an inventory of $193,000, equity of $395,100, total assets of $578,800, and sales of $612,300. What is the common-size percentage for the inventory account?
a) 16.20 percent
b) 31.52 percent
c) 48.85 percent
d) 19.82 percent
e) 33.34 percent
ANSWER 1 | c) AAPL has higher debt to equity than CSCO. | (Higher debt in AAPL, leads to increase in the Interest expense, which is decreasing the net income , thus the Return on Equity in AAPL is less compared to CSCO) |
ANSWER 2 | 7.89% | (return on total assets = net income / total assets) |
ANSWER 3 | 33.34% | (Inventory is a balance sheet item, so the common sizing of inventory will be done by Total Assets . Threrefore 193000/578800) |
1 AAPL has lower ROE than CSCO. Both companies have very similar ROA. Which of the...