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8. 2.77 points Assume the following data for Cable Corporation and Multi-Media Inc. Net income Sales Cable Corporation $ 30,7
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Cable corporation Multi-media inc
i Net income             30,700          115,000
ii sales          336,000       2,370,000
iii Total asset          485,000          919,000
iv total debt          229,000          465,000
v Stockholder's equity          256,000          454,000
ans a-1
i/v Return on equity = Net income /Shareholder's equity 11.99% 25.33%
ans a-2 Correct answer is option : Multi-media inc has higher return.
ans b Cable corporation Multi-media inc
Net income/sales 9.14% 4.85%
net income/total asset 6.33% 12.51%
sales/total asset                 0.69                 2.58
Debt/Total asset 47.22% 50.60%
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