Comparing Abercrombie & Fitch and TJX Companies Following are selected financial statement data from Abercrombie & Fitch (ANF—upscale clothing retailer) and TJX Companies (TJX—value-priced clothing retailer, including TJ Maxx).

$ thousands Company Total Assets Net Income Sales 2015 . . . . . . . . . . . . . TJX Companies Inc. . . . . . . . . . . . $10,988,750 — —

2016 . . . . . . . . . . . . . TJX Companies Inc. . . . . . . . . . . . 11,499,482 $2,277,658 $30,944,938 2015 . . . . . . . . . . . . . Abercrombie & Fitch. . . . . . . . . . . 2,505,167 — —

2016 . . . . . . . . . . . . . Abercrombie & Fitch. . . . . . . . . . . 2,443,039 35,576 3,518,680 Required

a. Compute the return on assets for both companies for the year ended 2016.

b. Disaggregate the ROAs for both companies into the profit margin and asset turnover.

c. What differences are observed? Evaluate these differences in light of the two companies’ business models. Which company has better financial performance?