P2-41. Comparing Operating Characteristics Across Industries Following are selected income statement and balance sheet data for companies in different industries. Cost of Goods Sold Gross Profit Net Income $ millions Sales Assets Liabilities Target Corp............. Nike Inc. .............. Harley-Davidson ...... Cisco Systems ........... $73,785 32,376 5,995 49,247 $51,997 17,405 3,620 18,287 $21,788 14,971 2,375 30,960 $3,363 3,760 752 10,739 $ 40,262 21,396 9,991 121,652 $27,305 9,138 8,151 58,067 Stockholders' Equity $12,957 12,258 1,840 63,585 Required a. Compute the following ratios for each company. 1. Gross profit/Sales 2. Net income/Sales 3. Net income/Stockholders' equity 4. Liabilities/Stockholders' equity b. Comment on any differences among the companies' gross profit-to-sales ratios and net income as a percentage of sales. Do differences in the companies' business models explain the differences observed? c. Which company reports the highest ratio of net income to equity? Suggest one or more reasons for this result. d. Which company has financed itself with the highest percentage of liabilities to equity? Suggest one or more reasons why this company can take on such debt levels