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




Cost of goods sold



Net income



Average inventory



Average total assets



(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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