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Instructor Notes for
Interpreting Margin and Turnover Ratios*
Overview:
The objective of this case is to illustrate the determinants of margin and turnover ratios. Textbooks
frequently recommend comparing margin and turnover ratios over time and across firms to identify
the three parts of the case.
Determinant 1: Industry Production Technology
Determinant 3: Corporate Strategy – Vertical Integration versus Outsourcing
High Turnover, Low Margin
Food Wholesalers (MG757)
Drugs Wholesale (MG756)
Low Turnover, High Margin
Mortgage Investment (MG447)
REITs (MG440)
National Beverage (FIZ)
Papa Johns International (PZZA)
Par Pharmaceutical Cos. (PRX)
Coca-Cola Co (KO)
IHOP Corp (IHP)
Sepracor Inc. (SEPR)
High Turnover, Low Margin
Low Turnover, High Margin
