PA11-5 Computing and Interpreting Return on Equity (ROE) and Price/Earnings (P/E) Ratios [LO 11-5] Two online magazine companies reported the following in their financial statements: BusinessWorld Fun and Games 2018 2017 2018 2017 Net income $ 110,000 $ 108,604 $ 91,420 $ 172,173 Total stockholders' equity 587,186 512,814 447,151 467,049 Earnings per share 3.20 3.19 2.10 3.98 Stock price when annual results reported 54.40 51.04 32.55 59.70 Required: 1-a. Compute the 2018 ROE for each company. 1-b. Which company appears to generate greater returns on stockholders’ equity in 2018? 2-a. Compute the 2018 P/E ratio for each company. 2-b. Which company do investors appear to value more?

Reliability and validity reliability and validity are two important considerations that must be made with any type of data collection. reliability refers to the ability to consistently produce a given result. in the context of psychological research, this would mean that any instruments or tools used to collect data do so in consistent, reproducible ways. unfortunately, being consistent in measurement does not necessarily mean that you have measured something correctly. to illustrate this concept, consider a kitchen scale that would be used to measure the weight of cereal that you eat in the morning. if the scale is not properly calibrated, it may consistently under- or overestimate the amount of cereal that’s being measured. while the scale is highly reliable in producing consistent results (e. g., the same amount of cereal poured onto the scale produces the same reading each time), those results are incorrect. this is where validity comes into play. validity refers to the extent to which a given instrument or tool accurately measures what it’s supposed to measure. while any valid measure is by necessity reliable, the reverse is not necessarily true. researchers strive to use instruments that are both highly reliable and valid.

When a shortage or a surplus arises in the loanable funds market a. the supply of loanable funds changes to return the economy to its original real interest rate b. the nominal interest rate is pulled to the new equilibrium level c. the demand for loanable funds changes to return the economy to its original real interest rate d. the real interest rate is pulled to the new equilibrium level

What is used by accountant to analyze transactions ?