You are considering investing in the grocery sector and have identified two companies for further analysis. Financial
Question:
You are considering investing in the grocery sector and have identified two companies for further analysis. Financial information for the two companies is as follows:
Required
a. Calculate and compare the following ratios for the two companies:
i. Return on assets
ii. Gross margin
iii. Profit margin
iv. Inventory turnover
v. Days to sell inventory
b. Which company is likely following a product differentiation strategy? Support your conclusion with reference to the ratios in part “a.” What strategy might the other company be following?
Transcribed Image Text:
(in thousands) Sales Cost of goods sold Net income Average inventory Average total assets Company Alpha Company Omega $1,960,000 1,762,000 103,000 150,600 792,308 $1,750,000 1,487,500 100,000 215,800 769,231
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a Ratio Company Alpha Company Omega i Return on assets 103000792308 130 100000769231 130 Alpha and O...View the full answer
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Related Book For
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
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