Selected ratios for three different companies that operate in three different

Selected ratios for three different companies that operate in three different industries (merchandising pharmaceuticals utilities) are reported in the
table below:

Ratio

Co. A

Co. B

Co. C

Gross profit margin ratio

18%

53%

n.a.

Net profit margin ratio

2%

14%

8%

Research and development to sales

0%

17%

0.1%

Advertising to sales.

7%

4%

0.1%

Interest expense to sales

1%

1%

15%

Return on assets

11%

12%

7%

Accounts receivable turnover

95 times

5 times

11 times

Inventory turnover

9 times

3 times

n.a.

Long-term debt to equity

64%

45%

89%

n.a. =not applicable

Required:

Identify the industry that each of the companies A B and C operate in. Give at least two reasons supporting each of your selections.

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