Comparing 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). (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 ($ millions) ANF TJX Sales $3,750 $18,647 Cost of goods sold 1,239 96 14,082 Gross profit 2,511 4,565 Total expenses 2,035 96 3,793 96 Net income $ 476 96 $ 772 96 96 96 96 (b) Express each balance sheet amount as a percentage of total assets. Round your answers to one decimal place (ex: 0.2345 = 23.5%). 96 96 Balance Sheet ($ millions) ANF Current assets $1,140 Long-term assets 1,427 Total assets $2,567 Current liabilities $ 543 Long-term liabilities 406 Total liabilities 949 Stockholders' equity 1,618 Total liabilities and equity $2,567 TJX 96 $3,992 96 2,608 $6,600 96 $2,761 96 1,708 96 4,469 96 2,131 $6,600 96 96 96 96 Which of the following statements about business models is most consistent with the computations for part (a)? OANF's expenses as a percentage of sales are higher because it spends more on advertising than does TJX. OANF 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." OANF's profit is higher than TJX's as a percentage of sales because its sales are higher than TJX's. OANF'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)? Total llabilities and equity 32:30 30,000 Which of the following statements about business models is most consistent with the computations for part (a)? OANF's expenses as a percentage of sales are higher because it spends more on advertising than does TJX. OANF 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." OANF's profit is higher than TJX's as a percentage of sales because its sales are higher than TJX's. OANF'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)? OANF reports lower current assets as a percentage of total assets because it pays its vendors on a more timely basis than does TJX. OANF reports higher long-term assets as a percentage of total assets because it depreciates its long-term assets more slowly than does TJX. OANF 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. OANF 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 of debt? What do the ratios tell us about relative riskiness of the two companies? OANF has a lower proportion of debt than does TJX, which implies that ANF is less risky than TJX. OTJX has a lower proportion of debt than does ANF, which implies that TJX is less risky than ANF. OANF has a higher proportion of debt than does TJX, which implies that ANF is less risky than TJX. OTJX has a higher proportion of debt than does ANF, which implies that TJX is less risky than ANF