Solution-Calculate return on assets and profit margin ratios

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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Calculate return on assets and profit margin ratios

Reference no: EM132184728

Reference no: EM132184728

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