E17.4. Interpretation of Diagnostics (Easy) The following lists a number of ratios against the average for the ratio over the prior three years. For each, indicate whether the ratio suggests that return on net operating assets will be higher or lower in the following year. Ratio Bad debt expense/Sales Warranty expenseSales Current Level Average, Prior Three Years 2.34 percent 4.12 percent 3.59 percent 2.30 percent Net sales/Accounts receivable 7.34 5.88 Inventory Sales 0.23 0.12 1.3 1.5 0.9 0.25 Depreciation/Capital expenditure Deferred revenue/Sales