Using data from theboth companies, compare their performances. In your analysis, explain which company you would prefer doing business from the perspective of the following parties:

• An investor; and
• An inventory supplier.

Tempur Sealy International Inc | Ratios - Key Metrics Ratios - Key Metrics Industry - Annual Standardised in Millions of U.S. Dollars 2016 2017 2018 2019 2020 Profitability Gross Margin 41.9% 42.8% 42.6% 43.2% 44.6% EBITDA Margin 15.3% 15.1% 13.2% 14.5% 17.7% Operating Margin 11.8% 11.2% 9.4% 11.1% 14.3% Pretax Margin 9.2% 8.0% 6.1% 8.5% 12.3% Effective Tax Rate 30.4% 31.4% 34.2% 28.1% 22.7% Net Margin 6.4% 5.5% 4.0% 6.1% 9.5% DuPont/Earning Power Asset Turnover 1.15 1.00 1.00 1.08 1.15 x Pretax Margin 9.2% 8.0% 6.1% 8.5% 2.3% Pretax ROA 10.6% 8.0% 6.1% 9.2% 4.2% x Leverage (Assets/Equity) 23.95 12.65 8.52 6.57 Pretax ROE 231.2% 637.3% 100.9% 2.5% 104.8% Tax Complement 0.67 0.70 0.61 0.71 0.77 ROE 165.4% 68.9% 58.2% 56.5% 80.8% x Earnings Retention 1.00 1.00 1.00 1.00 1.00 Reinvestment Rate 165.4% 468.9% 68.2% 66.5% 80.8% Liquidity Quick Ratio 0.84 0.74 0.87 0.83 0.67 Current Ratio 1.19 L. 05 1.20 1.16 0.99 Times Interest Earned 4 .8 3.8 2.9 (4.0) (6.8) Cash Cycle (Days 32.0 33.8 33.4 38.6 37.3 Leverage Assets/Equity 23.95 12.65 8.52 6.57 Debt/Equity 15.58 7.67 4.28 2.71 Debt/Asset 1.00 0.96 0.92 0.88 0.85 % LT Debt to Total Capital 98.1% 90.0% 35.8% 79.1% 70.4% (Total Debt - Cash) / EBITDA 3.30 4.32 4.63 3.41 2.13 Operating A/R Turnover 8.5 8.3 8.5 9.0 9.7 Avg. A/R Days 42.8 44.2 42.8 40.9 37.6 Inv Turnover 9.0 8.2 7. 7 7.3 7.1 47.4 50.1 Avg. Inventory Days 40.4 44.5 51.4 Avg. A/P Days 51.2 54.8 56.8 52.4 51.7 Fixed Asset Turnover 7.86 6.31 6.33 5.64 4.92 NC / Sales Growth (1.1%) 0.8%) 0.5% 1.2% (2.6%) Bad Debt Allowance (% of A/R) 6.6% 7.9% 14.8% 19.3% 18.7% ROIC 9.7% 7.0% 5.2% 8.8% 15.2% Revenue per Employee ($) $424,786.20 $377,706.30 $409,530.30 $456,764.70 $448,402.40 Price Earnings Ratio 34.45 19.31 16.08 31.04 23.05Sleep Number Corp | Ratios - Key Metrics Ratios - Key Metrics Industry - Annual Standardised in Millions of U.S. Dollars 2016 2017 2018 2019 2020 Profitability Gross Margin 61.8% 62.1% 60.6% 61.9% 62.3% gross proft margin: Gross profit/revenuex100 EBITDA Margin 10.2% 10.6% 10.1% 10.3% 13.3% Operating Margin 5.8% 5.4% 6.0% 6.6% 10.0% Pretax Margin 5.8% 5.3% 5.6% 5.9% 9.5% Effective Tax Rate 32.3% 30.4% 23.0% 18.6% 20.9% Net Margin 3.9% 1.4% 4.4% 4.8% 7.5% profit margin: Net income after taxes/revenuex100 DuPont/Earning Power 3.11 2.31 Asset Turnover 2.74 3.25 2.66 5.9% x Pretax Margin 5.8% 5.3% 5.6% 9.5% Pretax ROA 15.9% 19.6% 18.4% 12.8% 17.3% pre-tax return on assest: Net income before taxes/average total assetx100 x Leverage (Assets/Equity) 2.85 5.29 Pretax ROE 39.7% 73.0% x Tax Complement 0.68 0.71 0.80 0.81 0.79 26.9% 50.8% (670.0%) (72.6%) return on equity: Net income before extraordinary items/average total equityx100 ROE (60.8%) x Earnings Retention 1.00 1.00 1.00 1.00 1.00 Reinvestment Rate 26.9% 50.8% Liquidity Quick Ratio 0.28 0.22 0.14 0.12 0.15 (Current assets -inventory)/Current liabilities Current Ratio 0.61 0.50 0.31 0.27 0.28 Current assets/Current liabilities Times Interest Earned 94.6 94.5 15.7 (9.7) (20.5) interest coverage ratio: Operating incomeet interest expense Cash Cycle (Days) (8.5) (20.2) (26.5) (23.0) ( 5.2) Leverage Assets/Equity 2.85 5.29 Debt/Equity 0.00 0.27 Debt/Asset 0.65 0.81 1.23 1.20 1.28 debt to asset ratio: Total liabilities/total assets % LT Debt to Total Capital 0.0% 0.0% 0.0% 0.0% 0.0% (Total Debt - Cash) / EBITDA 0.03 0.71 1.23 0.95 Operating A/R Turnover 41.0 74.0 69.4 49.7 36.4 debtors turnover: Revenue/average accounts receivable-trade, net Avg. A/R Days 8.9 4.9 5.3 7.4 10.2 Inv Turnover 6.2 6.9 7.1 7.5 8.3 inventory turnover: Cost of revenue/average total inventory 48.7 Avg. Inventory Days 59.0 53.3 51.3 44.6 76.4 83.1 60.0 Avg. A/P Days 78.5 79.1 Fixed Asset Turnover 6.35 6.93 7.39 4.65 3.66 WC / Sales Growth (5.1%) (3.4%) 17.7%) (6.7%) (1.7% Bad Debt Allowance (% of A/R) 4.5% 3.79 2.8% 2.1% 1.8% ROIC 20.3% 31.9% 90.7% 84.9% 78.3% Revenue per Employee ($) $372,790.60 $375,926.40 $374,102.30 $396,996.70 $409,203.20