Garner Inc

question 17

Multiple Choice

Garner Inc. and Tanex Corp. are competitors in the equipment manufacturing industry. Garner has a P/S ratio of 3.2, whereas Tanex has a P/S ratio of 1.8. Which of the following best justifies the difference in P/S ratios between the two firms? Relative to Garner, Tanex has a:

• A) higher total asset turnover.
• B) lower beta.
• C) lower net profit margin.
• D) lower total asset turnover.

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Definitions:

Talcott Parsons

A prominent American sociologist known for his contributions to social action theory and for developing a framework for the study of society that emphasized the functional relationships between its parts.

Service Sector

The segment of the economy that provides intangible goods and services, including healthcare, education, entertainment, and financial services, among others.

Rapid Growth

A phase in which an entity (such as an economy, company, or biological organism) experiences a significantly faster than usual increase in size or numbers.

Wealthy Owning Class

A segment of society composed of individuals and families that possess a significant portion of the wealth, often exercising considerable economic and political influence.