Forecasts for a competitor company x inc

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The following table shows data for C Inc.

 

Current Year

Next Year Forecast

Total Assets

200,000

220,000

Equity Multiplier

1.8

1.8

Revenues

300,000

330,000

Net Profit

24,000

33,000

Forecasts for a competitor company X Inc. expect it to achieve asset turnover of 1.5x, equity multiplier of 1.5x, and profit margin of 12.0%. Just based on ROE expectations, which company would be preferred by investors and why?

Reference no: EM133074305

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