Presented below are selected ratios for four firms: Firm A is a distiller, Firm B is a jewelry retailer, Firm C is an airline, and Firm D is a hotel chain.

Required:
1. Explain why the long-term debt-to-equity ratio is so much higher for the airline and hotel chain than it is for the distiller and jewelry retailer.
2. Explain why the turnover ratios vary so much among the four firms.
3. Explain why the return on equity for the airline and hotel chain is higher than for the distiller and jewelry retailer when their operating income and net income percentages are considerablysmaller.

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Firm A Firm Firm C irm D Short-term liquidity Debt-management ratio Asset efficiency ratios Current ratio Long-term debt to equity 0.24 0.20 562.11 209.48 17.07 0.95 19.72 31.43 11.09 Accounts receivable turnover Inventory turnover 7.66 2.30 7.24 92% 7.9 Profitability ratios Operating income Net income Return on assets Return on equity 15.5% 9.6 8.6 14.9 4.2% 2.2 13.1 11.9 23.7 49.2 34.5