Selected ratios for two retailers follow, along with the industry averages:

Instructions
(a) Compare the profitability of Bargain Hunters with that of Discount Paradise, and with the industry average. Which company is more profitable? Explain.
(b) You would like to invest in the shares of one of the two companies. Your goal is to have regular income from your investment that will help pay your tuition fees for the next few years. Which of the two companies is a better choice for you? Explain.
(c) Assume that instead of looking for regular income, you are looking for growth in the share value so that you can resell the shares at a gain in the future. Now which of the two companies is better for you? Explain.

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Bargain Hunters Discount Paradise Industry Average Return on common shareholders' equity Return on assets Asset turnover Earnings per share Price-earnings ratio Payout ratio Dividend yield 6.8% 24.9% 10.2% 1.5 times $3.30 12.3 times 9.4% 0.8% 3.5% 22.4% 8.8% 2.5 times $2.49 17.0 times 25.0% 20.8% 9.2% 2.5 times n/a 16.3 times 19.3% 1.2%