Selected ratios for three different companies that operate

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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.

Reference no: EM13573488

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