Calculate return on assets and profit margin ratios

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Reference no: EM132184728

Question - You are considering investing in the retail sector and have identified two companies for further analysis. Financial information for the two companies is as follows:

(in thousands)

Company A

Company B

Sales

$1,290,000

$1,349,000

Cost of goods sold

670,800

984,770

Net income

101,600

62,400

Average inventory

223,200

154,700

Average total assets

811,323

498,293

(a) Calculate and compare the following ratios for the two companies:

i. Return on assets.

ii. Gross margin.

iii. Profit margin.

iv. Inventory turnover.

v. Days to sell inventory.

Reference no: EM132184728

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