Question

company A and company B are un simimar industry comment on there comparative performances
company A 2010  
net income 5040 gross profit ratio 24.05%
2011
net income 14400 gross profit ratio
38.20%
company B 2011
net loss 5500 gross profit ratio 52.13%
2010
net income 2000 gross profit ratio 46.80%

Answer 1

	DATA OF THE COMPANY A AND COMPANY B IS GIVEN AS BELOW
		Company A	Company B	Company A	Company B
		2010	2010	2011	2011
	Net income	$                          5,040	$                     2,000	$             14,400	$                       5,500
	Gross Profit Ratio	24.05%	46.80%	38.20%	52.13%
	Net income of the company A is greater than company B in the both year i.e .2010 and 2011.
	but Company B is performing much better than company A this is because the Gross profit Ratio.
	Gross Profit ratio of Company A = 24.05% in the year 2010 and the same time company B is Gross profit is 46.8%
	It means the material purchase cost and other manufacturing cost is very low company to company A
	In the Year 2011 , Company A Gross profit margin increases 14.5% , This is good sign for the performance of the company A
	And the same time Company B gross profit is increse only by 5.33% in the year 2011.
	Overall performance of the Company B is better than Company A this is because there margin is very good compare to Company A