Gulf Controls, Inc., has a net profit margin of 10 percent and earnings after taxes of $600,000. Its current balance sheet follows:

Current Assets: 1,800,000

Fixed assets: 2,200,000

Total Assets: 4,000,000

Current Liabilities: 600,000

Long Term Debt: 1,000,000

Common Stock: 500,000

Retained Earnings 1,900,000

Total Liabilties and and StockHolders Equity: 4,000,000

Calculate Gulfs return on stockholders equity.

The industry average ratios are as follows:

Net Profit Margin: 6%

Total Asset Turnover:2.5 times

Equity Mutiplier: 1.4 times

Compare Gulf Controls with the average firm in the industry. What is the source of the major differences between the Gulf and the industry average ratios?