How do the two companies roics compare

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Reference no: EM133442608

Questions: Answer the questions below based on the following information. The tax rate is 40%, and all dollars are in millions. Assume that the companies have no liabilities other than the debt shown below. (in Millions) Samsung Co. Apple Co. Earnings before interest and taxes $ 750 $ 900 Debt (at 9% interest) $ 250 $ 500 Equity $ 1500 $ 750

a. Calculate each company's ROE, ROA, and ROIC.

b. Why is Apple's ROE so much higher than Samsung's? Does this mean Apple is a better company? Why or why not?

c. Why is Samsung's ROA higher than Apple's? What does this tell you about the two companies?

d. How do the two companies' ROICs compare? What does this suggest about the two companies?

Reference no: EM133442608

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