Identify and Classify Balance Sheet and Income Statement Accounts Prepare Common$-$Size Balance Sheets and Income Statements

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$),$ for a recent fiscal year. a$.$ Express each income statement amount as a percentage of sales. Note: Round percentages to one decimal place. Examples: Enter $3\mathrm{.}44\%$ as $3\mathrm{.}4\%$ or $3\mathrm{.}45\%$ as $3\mathrm{.}5\%.$

Comment on the differences between these two companies by completing the following statements: ANF's gross profit margin is

than that of TJX$.$ The high$-$end segment also requires

additional personnel, advertising, and other operating costs. ANF's expense margin is nearly three times

$.$ On balance, TJX is

profitable than ANF with each sales dollar. b$.$ Express each balance sheet amount as a percent age of total assets. Note: Round percentages to one decimal place. Examples: Enter $3\mathrm{.}44\%$ as $3\mathrm{.}4\%$ or $3\mathrm{.}45\%$ as $3\mathrm{.}5\%.$

Comment on the differences between these two companies by completing the following sentences: ANF has slightly

levels of current assets relative to total assets than does TJX$.$ For

clothing retailers, current assets are primarily cash and inventories. If the two companies have about the same levels of cash, we would conclude that ANF holds

inventory.

c$.$ Which company has a lower proportion of debt? Which of these companies exhibits greater risk based on the proportion of debt?

has a smaller proportion of total liabilities in its capital structure.

is a slightly riskier company.

Following are selected accounts for Best Buy Inc. for a recent fiscal year.

a$.$ Indicate whether each account appears on the balance sheet $($B$)$ or income statement $($I$).$

b$.$ Using the given data $($account balances and financial statement balances$),$ compute total assets and total expenses. Note: Do not use any negative signs.