Question 2: Selected information below is provided of two different companies competing in retail clothing industries:

	Bardot ($)	Review ($)
Sales revenue	2 000 000	1 000 000
Cost of sales	(1 500 000)	(400 000)
Gross Profit	500 000	600 000
Less: Expenses	(300 000)	(300 000)
Profit	200 000	300 000
Total assets	500 000	400 000

Required

1. Calculate Return on Asset, Profit Margin and Asset turnover ratio. Provide calculations and compare and interpret each ratio of Bardot and Review in terms of their relative comparative performance.
2. From your calculation in part (a) explain the different business approaches the two companies have adopted.
3. Explain how increasing the proportion of debt to assets can affect profitability ratios.