Question: Why would the inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company? Why is it sometimes misleading

Why would the inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company?

Why is it sometimes misleading to compare a companys financial ratios with those of other firms that operate in the same industry?

Suppose you were comparing a discount merchandiser with a high-end merchandiser. Suppose further that both companies had identical ROEs. If you applied the DuPont equation to both firms, would you expect the three components to be the same for each company? If not, explain what balance sheet and income statement items might lead to the component differences.

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