Presented below are selected ratios for four firms. Rosemont is a distiller, Adler is a jewelry retailer, Menzel is an airline, and Gallagher is a hotel chain.

Required:
1. Explain why the long-term debt-to-equity ratio is so much higher for the airline and hotel chain than it is for the distiller and jewelry retailer.
2. Explain why the turnover ratios vary so much among the four firms.
3. Explain why the return on equity for the airline and hotel chain is higher than for the distiller and jewelry retailer when their operating income and net income percentages are considerably smaller.

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Adler 3.5 0.20 Rosemont Menzel Gallagher Short term liquidity ratio Debt management ratio Asset efficiency ratios 1.5 1.4 562. 209.48 11.09 Current ratio 0.9 Long-term debtto-equity 0.24 Accounts receivable turnover Inventory turnover 7.66 2.30 17.07 0.95 19.72 31.43 7.24 Profitability ratios Operating income Net income Return on assets Return on equity 177% 13.1 11.9 23.7 15.5% 9.6 8.6 14.9 4.2% 2.2 1.8 49.2 92% 5.4 7.9 34.5