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Exam 4: Profitability Analysis

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Question 51

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Discuss the economic characteristics of firms that have the following mix of profit margin and asset turnover.In addition provide an example of an industry that would have the relevant profit margin asset turnover mix: A.High profit margin and low asset turnover. B.Low profit margin and high asset turnover

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Question 52

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The ability of a firm to manage the level of investment in assets for a particular level of sales is measured by the ______________________________.

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Question 53

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Time-series analysis helps answer all of the following questions except:

Carl Industries Carl Industries has condensed balance sheets as shown: -Refer to the information for Carl Industries.In a common size balance sheet for 2009,total liabilities and equity are expressed as:

Extreme Sports Company and All Sports Corporation Below is financial information for two sporting goods retailers.Extreme Sports Company operates a retail business and franchising business.At the end 2011,Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores.Extreme's stores are located in suburban,strip mall and regional mall locations,the company operates in 32 states.All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores. Selected Data for All Sports and Extreme Sports (amounts in millions) -Refer to the information for Extreme Sports Company and All Sports Corporation. Calculate All Sports' inventory turnover ratio.

Which of the following scenarios is consistent with an increasing cost of goods sold to sales percentage and increasing inventory turnover?