Compare Operating Characteristics Across Industries

Following are selected income statement and balance sheet data for companies in different industries.

$ millions Sales Cost of Goods Sold Net Income Assets Liabilities Stockholders$$ Equity

Target $$109,120$ $$82,229$ $$2,780$ $$53,335$ $$42,103$ $$11,232$

Nike $46,71025,2316,04640,32125,04015,281$

Harley$-$Davidson $5,7553,62173911,4928,5862,903$

Abbott Laboratories $43,65319,1426,93374,43837,53336,686$

Required

a$.$ Compute the gross profit$/$sales$,$ net income$/$sales$,$ net income$/$stockholders$\text{'}$ equity, and liabilities$/$stockholders$\text{'}$ equity ratios for each company.

$ millions Numerator $-$: Denominator $=$ Gross Profit$/$Sales

Target Answer $1$

$-$: Answer $2$

$=$

Nike Answer $3$

$-$: Answer $4$

$=$

Harley$-$Davidson Answer $5$

$-$: Answer $6$

$=$

Abbott Laboratories Answer $7$

$-$: Answer $8$

$=$

$ millions Numerator $-$: Denominator Net income$/$Sales

Target Answer $9$

$-$: Answer $10$

$=$

Nike Answer $11$

$-$: Answer $12$

$=$

Harley$-$Davidson Answer $13$

$-$: Answer $14$

$=$

Abbott Laboratories Answer $15$

$-$: Answer $16$

$=$

$ millions Numerator $-$: Denominator $=$ Net income$/$Stockholders$\text{'}$ equity

Target Answer $17$

$-$: Answer $18$

$=$

Nike Answer $19$

$-$: Answer $20$

$=$

Harley$-$Davidson Answer $21$

$-$: Answer $22$

$=$

Abbott Laboratories Answer $23$

$-$: Answer $24$

$=$

$ millions Numerator $-$: Denominator $=$ Liabilities$/$Stockholders$\text{'}$ equity

Target Answer $25$

$-$: Answer $26$

$=$

Nike Answer $27$

$-$: Answer $28$

$=$

Harley$-$Davidson Answer $29$

$-$: Answer $30$

$=$

Abbott Laboratories Answer $31$

$-$: Answer $32$

$=$

b$.$ Profit margin $($Net income $/$ Sales$)$ is a function of both gross profit margin and expense control. Abbott Labs' profit margin is the Answer $33$

of the companies in this sample, due to its Answer $34$

gross profit margin.

c$.$ Which company reports the highest ratio of net income to equity?

Answer $35$

enjoys the highest return on equity $($measured as net income to equity$),$ followed by Answer $36$

whose equity is relatively low due to recent stock buybacks. Stock buybacks Answer $37$

equity.

d$.$ Which company has financed itself with the highest percentage of liabilities to equity?

Answer $38$

has the highest proportion of debt in its capital structure at least in part because the company has Answer $39$

common stock over the past five years.