Preferred Pet Care,Inc. ,has recorded the following on its income statement for the period ending,December 31,2014:
The return on sales = 34%.This return is outstanding and there is no need to compare this return to competitors in the veterinary services industry.

Question

Quizplus · Accepted Answer

While a return on sales of 34% may appear to be outstanding, it is important to compare this return to competitors in the veterinary services industry to gain a better understanding of the company's performance. Without comparing returns to industry standards, it is impossible to determine whether the return is truly exceptional or not.