A summary of selected historical results is presented below for three Canadian companies: Gildan Activewear, Research In Motion, and Andrew Peller. Each of these companies has grown in size over time by acquiring assets and investing in other companies. (Amounts are in millions of dollars.)

Required:
1. Compute the net profit margin and the return on equity ratios for each company for each of the Gildan Activewear Research In Motion Andrew Peller excel years 2007 and 2008 by using the table on the following page.

2. Based on the computed ratios, rank these companies from most successful to least successful in generating profit for shareholders.
3. Assume that you are interested in investing in one of these three companies, which company would you choose? Write a brief report to justify your choice.
4. Analysts examine both the profit and the cash flow from operating activities in evaluating a company. One measure that relates these two numbers is the quality of earnings ratio, which equals cash flow from operations divided by profit. The higher the ratio, the higher the quality of earnings. Compute this ratio for 2007 and 2008, and rank the three companies from highest to lowest based on the quality of their earnings.

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2008 2007 2006 2005 2004 Gildan Activewear Total shareholders' equity 812 664 531 421 328 Total revenue 1,250 964 773 654 533 Profit 145 130 107 86 60 Cash flow from operations 239 91 95 93 59 Research In Motion Total shareholders' equity 3,934 2,484 1,999 1,984 1,716 Total revenue 4,914 2,304 2,066 1,350 595 Profit 1,294 632 382 213 53 Cash flow from operations 1,577 736 150 278 64 Andrew Peller Total shareholders' equity 97 103 96 90 87 Total revenue 237 228 212 168 156 Profit 11 9 Cash flow from operations 14 10 65 8 9 19 7