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Evaluating Firm Profitability The following financial information is taken from the annual reports of the Smith Company and the Wesson Company: Smith Wesson Net income

Evaluating Firm Profitability The following financial information is taken from the annual reports of the Smith Company and the Wesson Company: Smith Wesson Net income $20,000 $180,000 Net sales 60,000 480,000.


Calculate the return on sales ratio for each company. Round to the nearest whole percentage, when appropriate. Smith Answer % Wesson Answer % Which firm is more profitable?

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