Helen owns three gift shops for which the following ratios have been prepared. The shops are all situated in large shopping centres one in Castle Hill, one in Chatswood and the other in Ryde.

Required:
A. In your own words explain the meaning of each of the three ratios listed. (Do not just give the formula for the ratio).
B. What is the interrelationship between the ratios? Explain.
C. What do the ratio results reveal about the sections of the gift market each shop is catering to?
D. Which shop is the best performer? Explain why you have chosen a particular measure from those above to reach this conclusion.

Transcribed Image Text:

Helen's Gift Shops Castle Hill Chatswood Ryde 10% 8% Return on assets 990 6% Profit margin 2.6% 3.3% Asset tumover3.4 times 1.9 times 1.3 times