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Summarised statements of financial position and other financial information for DIdasko Ltd and Bundoora Ltd are presented below. Both companies own and operate retail shops in Victoria. Statements of financial position as at 30/6/22: DIdasko Ltd Bundoora Ltd $ $ Current assets 420,000 472,000 Non-current assets 677,000 628,000 Total assets 1,097,000 1,100,000 Current liabilities 101,000 218,000 Non-current liabilities 191,000 420,000 Ordinary shareholders equity 805,000 462,000 Total liabilities and shareholders equity 1,097,000 1,100,000 Other information for the year ending 30/6/22: Sales 963,000 958,000 Cost of good sold 645,000 640,000 Interest expense 30,000 52,000 Income tax expense 66,000 61,000 Profit after income tax 153,000 143,000 Required A friend of yours is undertaking an analysis of these two companies. Included in the analysis are the following two ratios (it may be assumed that these have been calculated correctly): DIdasko Ltd Bundoora Ltd Return on owners equity 19% 31% Return on total assets 23% 23% Your friend made the following comment: I cannot understand how two companies can have the same return on total assets but completely different rates of return on owners equity. Using any additional calculations you think are necessary, explain the situation to your friend.

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