Compare Income Statements and Balance Sheets of Competitors

Following are selected income statement and balance sheet data from two retailers, Abercrombie & Fitch (clothing retailer in the high-end market) and TJX Companies (clothing retailer in the value-priced market), for the fiscal year ended February 2, 2019.

Income Statement ($ thousands) ANFTJX

Sales$3,590,109$38,972,934

Cost of goods sold1,430,19327,831,177

Gross profit2,159,91611,141,757

Total expenses2,081,1088,081,959

Net income$78,808$3,059,798

Balance Sheet ($ thousands)ANFTJX

Current assets$1,335,950$8,469,222

Long-term assets1,049,6435,856,807

Total assets$2,385,593$14,326,029

Current liabilities$558,917$5,531,374

Long-term liabilities608,0553,746,049

Total liabilities1,166,9729,277,423

Stockholders' equity1,218,6215,048,606

Total liabilities and equity$2,385,593$14,326,029

a.Express each income statement amount as a percentage of sales. Comment on any differences observed between the two companies, especially as they relate to their respective business models.

b.Express each balance sheet amount as a percentage of total assets. Comment on any differences observed between these two companies, especially as they relate to their respective business models.

c.Which company has a lower proportion of debt? What do the ratios tell us about the relative riskiness of the two companies?