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

(a) Express each income statement amount as a percentage of sales.

Round your answers to one decimal place (ex: 0.2345 = 23.5%)

Income Statement
($ thousands)	ANF			TJX
Sales	$3,590,109	Answer		$38,972,934	Answer
Cost of goods sold	1,430,193	Answer		27,831,177	Answer
Gross profit	2,159,916	Answer		11,141,757	Answer
Total expenses	2,081,108	Answer		8,081,959	Answer
Net income	$ 78,808	Answer		$3,059,798	Answer

(b) Express each balance sheet amount as a percentage of total assets.

Round your answers to one decimal place (ex: 0.2345 = 23.5%).

Balance Sheet
($ thousands)	ANF			TJX
Current assets	$1,335,950	Answer		$8,469,222	Answer
Long-term assets	1,049,643	Answer		5,856,807	Answer
Total assets	$2,385,593	Answer		$14,326,029	Answer
Current liabilities	$558,917	Answer		$5,531,374	Answer
Long-term liabilities	608,055	Answer		3,746,049	Answer
Total liabilities	1,166,972	Answer		9,277,423	Answer
Stockholders' equity	1,218,621	Answer		5,048,606	Answer
Total liabilities and equity	$2,385,593	Answer		$14,326,029	Answer

Which of the following statements about business models is most consistent with the computations for part (a)?

ANF's expenses as a percentage of sales are higher because it spends more on advertising than does TJX.

ANF is a high-end retailer that is able to charge high prices for its products, but bears substantial operating costs to support its "shopping experience."

ANF's profit is higher than TJX's as a percentage of sales because its sales are higher than TJX's.

ANF's gross profit is higher than TJX's because its sales volume allows it to manufacture clothes at a lower per unit cost than can TJX.

Which of the following statements about business models is most consistent with the computations for part (b)?

ANF reports lower current assets as a percentage of total assets because it pays its vendors on a more timely basis than does TJX.

ANF reports higher long-term assets as a percentage of total assets because it depreciates its long-term assets more slowly than does TJX.

ANF reports lower current assets and higher long-term assets as a percentage of total assets because it carries less inventory and has a greater capital investment in its stores than does TJX.

ANF reports lower current assets as a percentage of total assets because it is a smaller company and cannot afford the investment in inventory.

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

ANF has a lower proportion of debt than does TJX, which implies that ANF is less risky than TJX.

TJX has a lower proportion of debt than does ANF, which implies that TJX is less risky than ANF.

ANF has a higher proportion of debt than does TJX, which implies that ANF is less risky than TJX.

TJX has a higher proportion of debt than does ANF, which implies that TJX is less risky than ANF.

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