978-0073526898 Case Interpreting Ratios Part 2

subject Type Homework Help
subject Pages 7
subject Words 260
subject Authors Richard Sloan, Russell Lundholm

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page-pf1
The Margin versus Turnover Trade-
Off
0%
5%
10%
15%
20%
25%
30%
35%
0 1 2 3 4 5 6 7 8 9 10 11
Turnover
Profit Margin
ROE=10%
ROE=20%
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Factors Influencing the Margin vs.
Turnover Trade-Off
Lower turnover (and higher margins) result from:
following a vertical integration versus an outsourcing strategy
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Ratio Analysis in eVal
Start eVal
Click ‘View Ratio Analysis’ button
time-series analysis
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Interactive Case: Task 1
Identify an example of an industry that
operates with low turnover ratios and high
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Interactive Case: Task 2
Identify an example of a product differentiator
and an example of a cost leader within a
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Interactive Case: Task 3
Identify an example of a vertical integrator and
an example of an outsourcer within a particular
reflected in the turnover ratios
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Recap
Ratio analysis should take place within a clear decision
context.
Ratio analysis does not provide answers, it just helps
guide your search for answers.

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