Assume the following data for Cable Corporation and Multi-Media, Inc.,,Cable Corporation:,Net income = $30,000,Sales = $300,000,Total assets = $400,000,Total debt = $150,000,Stockholders’ equity = $250,000,,Multi-Media, Inc.:,Net income = $100,000,Sales = $2,000,000,Total assets = $900,000,Total debt = $450,000,Stockholders’ equity =$ 450,000 ,,a. Compute return on stockholders’ equity for both firms using ROE-ratio Net income / stockholders’ equity. Which firm has the higher return?,,b. Compute the following additional ratios for both firms:,Net income / Sales…,Net income / Total assets…,Sales / Total assets…,Debt / Total assets…,,c. Discuss the factors from part b. above that added or detracted from one firm having a higher return on stockholders’ equity than the other firm as computed in part a. above.,
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