Connecting Operating Activities, Financing Activities, and Value Billboards–R–Us and Outdoor SignCorp have the following selected information available.
|
2005 |
2004 |
2003 |
2002 |
|
|
Billboards–R–Us: |
||||
|
Total assets |
$12,431 |
$11,665 |
$10,862 |
$9,989 |
|
Stockholders’ equity |
3,939 |
3,326 |
3,551 |
3,382 |
|
Net income (millions) |
804 |
199 |
704 |
761 |
|
Diluted earnings per share |
1.62 |
0.37 |
1.4 |
1.54 |
|
Market value per share |
28.5 |
20.63 |
24.25 |
24.81 |
|
Total market value |
13,680 |
9,902 |
11,761 |
11,810 |
|
Outdoor SignCorp: |
||||
|
Total assets |
$6,101 |
$5,533 |
$4,828 |
$4,077 |
|
Stockholders’ equity |
2,246 |
1,816 |
1,390 |
1,528 |
|
Net income (millions) |
740 |
694 |
331 |
644 |
|
Diluted earnings per share |
5.48 |
5.17 |
2.45 |
4.78 |
|
Market value per share |
97.13 |
77 |
67.5 |
69.13 |
|
Total market value |
13,112 |
10,326 |
9,113 |
9,311 |
Required
A. Calculate the return on assets, return on equity, and market to book value for each year.
B. Evaluate the effects that operating activities and financing activities appear to have had on the value of each company to its stockholders.
C. Has the stock price responded as you would expect? Explain.