Profitabilty Measures

timer Asked: Aug 4th, 2013

Question description

Table 2.1 (attached) compares companies according to different profitability measures:

  1. Which two of the six performance measures do you think are the most useful indicators of how well a company is being managed?
  2. Is return on sales or return on equity a better basis on which to compare the performance of the companies listed?
  3. Several companies are highly profitable, yet have delivered negative returns to their shareholders. How is this possible?

Please answer the questions

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