Question 1: Which firm would you expect to have the higher inventory turnover: an auto manufacturer or a department store? Why?
Question 2: Which firm would you expect to have the higher assets-to-sales ratio: a computer software firm or an electric utility? Why?
Question 3: Would you expect an industry with high inventory turnover to have a high profit margin on sales or a low profit margin on sales? Why?
Question 4: You are involved in an industry which is becoming more and more competitive by the year. Which of the three major ratio groups (profitability, turnover-control, or leverage-liquidity) would probably be impacted first by this change? Why?