Question 1 Wiley Sports Inc. has a ROE of 12.8...
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Finance
Question 1
- Wiley Sports Inc. has a ROE of 12.8 percent, a profit margin of 1.6 percent, and a total asset turnover ratio of 1.82 times. Its rival company Atlantic Sports Inc. also has a ROE of 12.8 percent but has outperformed Wiley Sports with a profit margin of 2.9 percent and a total asset assets turnover ratio of 2.5 times. Explain why Atlantic Sports can only achieve the same level of profitability as Wiley Sports measured by the ROE. (3 points)
- NTC company has an EM of 3.4 and JET Inc. has an EM of 2.5. Find the liabilities/assets ratio of the two companies, which company has a higher level of financial leverage (3 points).
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