COMPARISON: With this case, a comparison is made between 2 firms in different industries using Net Profit Margin, Total Asset Turnover and Return on Assets (RoA): Johnson & Johnson Consolidated Statement of Earnings Year ended December 28, 2008 ($ in millions, except per share) Sales to customers $63,747 Cost of Products sold $18,511 Gross Profit $45,236 Selling, Marketing & Administrative Expenses $21,490 Research expense $7,577 Purchased in-process Research & Development $181 Interest Income ($361) Interest Expense, net of capitalized $435 Other (Income) Expense, Net ($1,015) $28,307 Earnings before provision for taxes on Income $16,929 Provision for taxes on Income $3,980 Net Earnings $12,949 Basic Net Earnings per share $4.62 Diluted Net Earnings per share $4.57 From Consolidated Balance Sheet: Total Assets December 28, 2008 $84,912 December 28, 2007 $80,954 Best Buy Co Inc. Consolidated Statement of Earnings Year ended February 28, 2009 ($ in millions, except per share) Revenue $45,015 Cost of Goods sold $34,017 Gross Profit $10,998 Selling, Marketing & Administrative Expenses $8,984 Restructuring Charges $78 Goodwill & tradename impairment $66 Operating Income $1,870 Other (Income) Expense Investment Income $35 Investment Impairment ($111) Interest Expense ($94) Earnings before Income tax expense, minority interests, and equity in income (loss) of affiliates $1,700 Income tax expense $674 Minority interest in earnings ($30) Equity income (loss) of affiliates $7 Net Earnings $1,003 Basic Net Earnings per share $2.43 Diluted Net Earnings per share $2.39 From Consolidated Balance Sheet: Total Assets February 28, 2009 $15,826 March 1, 2008 $12,758

Required: a. Compute the following ratios for Johnson & Johnson:

1) Net Profit Margin

2) Total Asset Turnover

3) Return on Assets b.

Compute the following ratios for Best Buy:

1) Net Profit Margin

2) Total Asset Turnover

3) Return on Assets

c. Comment on the effect of the industry on these ratios