You are considering investing in the grocery sector and have identified two companies for further analysis. Financial information for the two companies is as follows:

Required

a. Calculate and compare the following ratios for the two companies:

i. Return on assets

ii. Gross margin

iii. Profit margin

iv. Inventory turnover 

v. Days to sell inventory 

b. Which company is likely following a product differentiation strategy? Support your conclusion with reference to the ratios in part “a.” What strategy might the other company be following?

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(in thousands) Sales Cost of goods sold Net income Average inventory Average total assets Company Alpha Company Omega $1,960,000 1,762,000 103,000 150,600 792,308 $1,750,000 1,487,500 100,000 215,800 769,231