Business Applications Case Performing ratio analysis using real-world data
The following data were taken from the 2008 annual reports of Biogen Idec, inc., and Genentech, Inc. Both companies are leaders in biotechnology. All dollar amounts are in millions.
| Biogen Idec | Genentech |
| December 31, 2008 | December 31,2008 |
Total assets | $8,479 | $21,787 |
Total liabilities | 2,673 | 6,116 |
Stockholders’ equity | 5,806 | 15,671 |
Net income | 783 | 3,427 |
Required
a. For each company, compute the debt to assets ratio, return on assets ratio, and return on equity ratio.
b. Which company has the greatest level of financial risk? Explain.
c. Which company appears to have managed its assets most efficiently? Explain.
d. Which company performed better from the perspective of the owners? Explain.
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