Comparing Operating Characteristics Across Industries Following are selected income statement and balance sheet data for companies in different industries. Cost of $ millions Target Corp. Sales $75,356 Stockholders' Goods Sold Net Income Assets Liabilities Equity $53,299 $2,937 $41,290 $29,993 $11,297 Nike, Inc. Harley-Davidson 5,717 36,397 20,441 1,933 22,536 12,724 9,812 3,352 531 10,666 8,892 1,774 Pfizer 53,647 11,248 11,188 159,422 95,664 63,758 (a) Compute the following ratios for each company. Round all answers to one decimal place (percentage answer example: 0.2345 = 23.5%). Note: The liabilities to stockholders' equity ratio should not be converted into a percentage answer (round answer to one decimal place, for example: 0.452 = 0.5). Company Target Corp. Nike, Inc. Gross Profit/Sales Net Income/ Sales Net Income/ Stockholders' Equity Liabilities/ Stockholders' Equity 0% 0% 0% 0 0% 0% 0% 0 Harley-Davidson: 0% 0% 0% 0 Pfizer 0% 0% 0% 0 (b) Which of the following statements about business models best describes the differences in gross (and net) profit margin that we observe? The higher gross profit companies are typically those that have some competitive advantage that allows them to charge a market price for their products that cannot be easily competed away. The lower gross profit companies are those that can manufacture their products at the lowest cost. The higher gross profit companies are those that sell the highest unit volumes.