Gogo Ltd and Bobo Ltd are both wholesale companies working in the same business segment. Given...
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Gogo Ltd and Bobo Ltd are both wholesale companies working in the same business segment. Given the information embedded in a number of ratios that we collected (see table below), they seem however, to take a different customer approach to their business. Ratio Gogo Ltd Bobo Ltd Return on capital 14% 15% employed Credit given 59 days 19 days Credit obtained 50 days 47 days Gross operating margin 42% 17% Current ratio 2.4 1.3 Net operating margin 11% 11% Days inventory 50 days 21 days outstanding Required: Explain what the ratios reveal with regard to the operating approach of Gogo Ltd and Bobo Ltd. Take into account price competitiveness and customer service level. Gogo Ltd and Bobo Ltd are both wholesale companies working in the same business segment. Given the information embedded in a number of ratios that we collected (see table below), they seem however, to take a different customer approach to their business. Ratio Gogo Ltd Bobo Ltd Return on capital 14% 15% employed Credit given 59 days 19 days Credit obtained 50 days 47 days Gross operating margin 42% 17% Current ratio 2.4 1.3 Net operating margin 11% 11% Days inventory 50 days 21 days outstanding Required: Explain what the ratios reveal with regard to the operating approach of Gogo Ltd and Bobo Ltd. Take into account price competitiveness and customer service level.
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1 On the surface BOBO Ltds 15 percent return on capital appears to be superior to GOGO Ltds 14 perce... View the full answer
Related Book For
Advertising and Integrated Brand Promotion
ISBN: 978-0538473323
6th edition
Authors: Thomas O'Guinn, Chris Allen, Richard Semenik
Posted Date:
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