Este Lauder Co. and Avon Products Inc. compete in the beauty and personal care market. Avon Products Inc. is a manufacturer and marketer of beauty and related products. Avon's product categories are Beauty, Fashion and Home. Beauty consists of color cosmetics, fragrances, skin care and personal care. Fashion consists of fashion jewelry, watches, apparel, footwear, accessories and children's products. Home consists of gift and decorative products housewares, entertainment and leisure products, children's products and nutritional products. Its iness is conducted globally in one channel, direct selling (i.e., a personal demonstration and sale of products to consumers, usually in their homes or at their jobs.) Este Lauder Co. is a manufacturer and marketer of skin care, makeup, fragrance and hair care products. Este Lauder's products are sold in over 150 countries and territories under a number of brand names, including Estee Lauder, Aramis, Clinique, Origins, M.A.C, Bobbi Brown, La Mer and Aveda. It is also the global licensee for fragrances and/or cosmetics sold under brand names, such as Tommy Hilfiger, Donna Karan, Michael Kors, Tom Ford and Coach. It sells its products principally through limited distribution channels to complement the quality of its highly desirable products. These channels include over 30,000 points of sale, consisting of upscale department stores, perfumeries and pharmacies, specialty retailers, and prestige salons and spas. Consider the following ratios (a feature of the problem is that the firms are not identified below): Company A Company IB Ratio Historical Historical 5 Yr. Avg. 7.37% 62.58% 8.53% 4154% 1.83 3.69 Current Return on assets Gross margin Operating margin Return on equity Long-term debt/Equity Inventory turnover Current Year -0.77% 6 1.44% 3.87% -4.67% 2.40 3.38 Year 14.90% 80.1 0% 14.80% 33.88% 5 Yr. Avg 11.19% 77 97% 11.61% 28.67% 0.53 2.09 0.40 1.93