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Clearly, while comparing two companies, higher sales do not necessarily indicate higher profits. A recently published article in a prominent business magazine shows that the top ten names on the list of companies with the highest sales and the corresponding names on the list of companies with the highest profits are mutually exclusive.
Which of the following can properly be inferred based on the above statements?
  • a)
    While comparing two companies, the company with higher sales is more likely to have lower profits.
  • b)
    It is highly likely that two companies with different sales have the same profit margins.
  • c)
    Sales and profits have no correlation.
  • d)
    While comparing two companies, lower sales do not by themselves indicate lower profits.
  • e)
    In order to compete in the market, it is better for a company to have higher profits than higher sales.
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Clearly, while comparing two companies, higher sales do not necessaril...
Clearly, while comparing two companies, higher sales do not necessarily indicate higher profits. A recently published article in a prominent business magazine shows that the top ten names on the list of companies with the highest sales and the corresponding names on the list of companies with the highest profits are mutually exclusive.
Which of the following can properly be inferred based on the above statements?
Argument Analysis
 
Pre-Thinking
Conclusion Clarification
N/ A
Pre-Thinking Approach
In order to see which statement can be inferred by the passage, we need to observe all the facts given in the argument and see what must also be true if the information in the passage is true.
Linkage # 1
Since the given information shows that just by looking at the sales figures we cannot estimate the comparative profitability of two companies, we can infer that:
Inference1: The relative profitability of a company vis-a-vis another’s cannot be judged solely by looking at the companies’ sales figures.
Inference2:It is possible that even though a company has relatively lower sales, it is more profitable than the other company.
With this understanding in mind, let's take a look at the passage analysis.
Answer Choices
A
While comparing two companies, the company with higher sales is more likely to have lower profits.
Incorrect - No information given
The passage does not state any inverse correlation with sales and profits. It just says that higher sales do not always translate into higher profits.
B
It is highly likely that two companies with different sales have the same profit margins.
Incorrect - No information given
The passage makes no statement about similarity in profit margins.
C
Sales and profits have no correlation.
Incorrect - No information given
The passage states that higher sales do not always mean higher profits. This statement does not mean that for a company higher sales will not translate in to higher profits.
D
While comparing two companies, lower sales do not by themselves indicate lower profits.
Correct
This option is written along the lines of our pre-thinking per Inference # 2.
E
In order to compete in the market, it is better for a company to have higher profits than higher sales.
Incorrect - No information given
First of all, the author doesn’t say that a company cannot have both higher sales and profits. Second of all, the author never comments on what is better for competing in the market.
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Most Upvoted Answer
Clearly, while comparing two companies, higher sales do not necessaril...
Introduction:
The statement suggests that higher sales do not necessarily translate into higher profits when comparing two companies. The top ten companies with the highest sales and the top ten companies with the highest profits are mutually exclusive, indicating that there is no correlation between sales and profits.

Explanation:
To understand the inference that can be made based on the given statements, let's analyze each option:

a) While comparing two companies, the company with higher sales is more likely to have lower profits:
This statement contradicts the given information. The article states that the top companies with the highest sales do not appear in the list of companies with the highest profits. Therefore, this option is incorrect.

b) It is highly likely that two companies with different sales have the same profit margins:
There is no information provided to support this statement. The given information suggests that higher sales do not necessarily indicate higher profits, but it does not imply that two companies with different sales will have the same profit margins. Thus, this option is incorrect.

c) Sales and profits have no correlation:
This option correctly captures the inference that can be made based on the given statements. The fact that the top ten companies with the highest sales are not present in the list of companies with the highest profits indicates that there is no correlation between sales and profits. Therefore, this option is correct.

d) While comparing two companies, lower sales do not by themselves indicate lower profits:
This option is incorrect. The given statements do not provide any information about the relationship between lower sales and lower profits. The focus is on higher sales not translating into higher profits, but it does not address the relationship between lower sales and lower profits.

e) In order to compete in the market, it is better for a company to have higher profits than higher sales:
This option is not supported by the given information. The article does not suggest that higher profits are better than higher sales. It only states that higher sales do not necessarily lead to higher profits. Therefore, this option is incorrect.

Conclusion:
Based on the given statements, the only inference that can be properly made is that there is no correlation between sales and profits when comparing two companies. Higher sales do not necessarily indicate higher profits.
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Clearly, while comparing two companies, higher sales do not necessarily indicate higher profits. A recently published article in a prominent business magazine shows that the top ten names on the list of companies with the highest sales and the corresponding names on the list of companies with the highest profits are mutually exclusive.Which of the following can properly be inferred based on the above statements?a)While comparing two companies, the company with higher sales is more likely to have lower profits.b)It is highly likely that two companies with different sales have the same profit margins.c)Sales and profits have no correlation.d)While comparing two companies, lower sales do not by themselves indicate lower profits.e)In order to compete in the market, it is better for a company to have higher profits than higher sales.Correct answer is option 'D'. Can you explain this answer?
Question Description
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