Ware Company Has a Return on Assets of 15% and a Return

question 140

Essay

Ware Company has a return on assets of 15% and a return on common stockholders' equity of 10%.John Ware,the president of the company,has asked you to explain the reason for this difference.What causes the difference? How is the concept of financial leverage involved?

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Definitions:

White-Collar Crime

Financially motivated, non-violent crime committed by businesses and government professionals.

Mail Fraud

A type of financial fraud that involves using the postal service to carry out schemes designed to defraud others.

Embezzlement

The act of dishonestly withholding or misappropriating funds or property entrusted to one's care, typically in a workplace or official capacity.

Theft of Company Assets

The act of stealing or unlawfully taking assets, such as money or property, belonging to a company.