Ratio	Industry Average
Return on total assets	1.00
Book value per common share	10.00
Days' sales in inventory	300.00
Return on shareholders' equity	20.00
Times interest earned ratio	1.00

Questions:

a. Explain why it would be favourable and unfavourable if an actual company had ratio values that were higher or also lower than the listed Ratio Industry averages.

b. Categorize each Ratio as either a: Liquidity ratio, Coverage ratio, Activity ratio, or Profitability ratio.