b . Comment on the results . [ 3 marks , 1 mark each ] 1. Sales / COGS 2. Assets / Sales 3. Number of books sold / Sales

2. Discuss the economic characteristics of firms that have the following mix of profit margin and asset turnover . In addition , provide an example of an industry that would have the relevant profit margin asset turnover mix :

a . High profit margin and low asset turnover [ 2 marks ]

b . Low profit margin and high asset turnover . [ 2 marks ]

1. Friendly Bookstore has experienced rapid growth since its formation in 2017. Following is selected data from its annual report. Item Sales 2020 $1,260,000 2019 $970,000 Cost of Goods Sold $971,000 $598,000 $515,000 Net Income $53,000 $46,000 $39,000 Total Assets $1,100,000 $897,000 $768,000 85,703 73,192 63,200 Number of Books Sold Required: a. Perform a horizontal common-size analysis of the data given. [5 marks] 2020 2019 2018 Item Sales Cost of Goods Sold Net Income Total Assets Number of Books Sold b. Comment on the results. [3 marks, 1 mark each] 2018 2017 $840,000 $600,000 $360,000 $30,000 $545,000 45,187 2017