Adam conducted ratio analysis on two companies that he was considering for purchase. A software company had a net profit margin of 20%, whereas a grocery retailer had a net profit margin of 3%. Based on their respective profit margins, Adam concluded that the software company was a better buy. 

Identify a challenge to Adam's use of ratio analysis. Net profit margin does not account for operating costs. Grocery retailers supply essentials, whereas software is discretionary. He failed to consider geographical differences. He compared profitability for companies in different industries