Select and compute the following three ratios to best evaluate the companies. You will determine which ratios are best explaining why they are important.

Inventory turnover ratio

Quick Ratio

Return on Assets

$ (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted YEA 2019 39,117 21,643 17,474 3,753 8,949 12,702 49 (78) 4,801 772 4,029 $ $ $ 2.55 2.49 1,579.7 1,618.4 Note 38 31 11, 14, 33 5 Net sales 6 Cost of sales 7 Gross profit 8 (% of net sales) 9 Royalty and commission income 10 Other operating income 11 Other operating expenses 12 % of net sales) 13 Marketing and point-of-sale expenses 74 % of net sales) 15 Distribution and selling expenses 16 % of net sales) 17 General and administration expenses 18 % of net sales) 19 Sundry expenses 20 % of net sales) 21 Impairment losses (net) on accounts receivable and contract assets 22 Operating profit 23 % of net sales) 24 Financial income 25 Financial expenses 26 Income before taxes 27 % of net sales) 28 Income taxes 29 % of income before taxes) 30 Net income from continuing operations 31 % of net sales) 32 Gains/ (losses) from discontinued operations, net of tax 33 Net income Year ending Dec. 31, 2019 23,640 11,347 12,293 52.0% 154 56 9 ,843 41.6% 3,042 12.9% 4,997 21.1% 1,652 7.0% 134 0.6% 18 2,660 11.3% 64 166 2,558 10.8% 640 25.0% 1,918 8.1% 5 9 1,977 34 34 36 3 Company 1 Company 2 4,466 197 4,272 5,622 4 ASSETS 5 Current assets: 6 Cash and equivalents 7 Short-term investments 8 Accounts receivable, net 9 Other current financial assets 10 Inventories 11 Income tax recievables 12 Prepaid expenses and other current assets 13 Total current assets 14 Property, plant and equipment, net 15 Right-of-use assets 16 Trademarks 17 Identifiable intangible assets, net 18 Goodwill 19 Long-term-financial assets 20 Other non-current financial assets 21 Deferred income taxes and other assets 22 Total non-current assets 23 TOTAL ASSETS 1,968 16,525 4,744 2,220 292 2,625 544 4,085 94 1.076 10,936 2,380 2,931 859 305 1,257 367 450 1,196 9,745 20,681 283 154 2,011 7,192 23,717 43 733 2,612 5,010 229 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Short-term borrowing Current lease liabilities Other current financial liabilities Other current provisions Accounts payable Accrued liabilities Income taxes payable Other current liabilities Total current liabilities Long-term debt Deferred income taxes and other liabilities Non-current lease liabilities Pension and similar obligations Other non-current provisions Other non-current financial liabilities Total non-current liabilities Shareholders' equity: Common stock at stated value: Class A convertible 315 and 329 shares outstanding Class B - 1,253 and 1,272 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (loss) Retained earnings 235 1,446 2,703 2,437 618 538 8,753 1,595 280 2,399 7,866 3,464 3,347 229 257 109 4,869 6,811 7,163 231 1,643 196 45 6,555 Non-controlling interests 261 Total shareholders' equity TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 9,040 23,717 7,057 20,680