Fremont Electronics has income of $1 million. Columbus Electronics has income of $2 million. Which of the following statements is a correct statement?
1. Columbus Electronics is getting a higher return on assets employed.
2. Columbus Electronics has higher profit margins than does Fremont Electronics.
3. Fremont Electronics could be more profitable than Columbus Electronics in relation to resources employed.
4. No comparison can be made between Fremont Electronics and Columbus Electronics.
5. Fremont Electronics is not making good use of its resources.
Industry ratios should not be considered as absolute norms for a given industry because of all but which of the following?
1. The firms have different accounting methods.
2. Many companies have varied product lines.
3. Companies within the same industry may differ in their method of operations.
4. The fiscal year-ends of the companies may differ.
5. The financial services may be private independent firms.