Compute the return on assets and return on equity

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Using common size statements and ratios to make comparisons LO 4-8

The following information is available for the Memphis and Billings companies.

Memphis Billings
Sales $ 1,188,600
Cost of goods sold 783,800
Operating expenses 305,400
Total assets 1,130,000
Stockholders' equity 350,000

a. a common size income statement for each company.
b. Compute the return on assets and return on equity for each company.
c. Which company is more profitable from the stockholders' perspective?
d. One company is a high-end retailer, and the other operates a discount store. Which is the discounter?

Reference no: EM133433305

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