Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industryJohnson and Johnson (J&J) and Pfizer, Inc. ($ in millions, except per share amounts).

Balance Sheets ($ in millions, except per share data)
	J&J				Pfizer
Assets:
Cash	$	13,369			$	8,219
Short-term investments		5,529				11,785
Accounts receivable (net)		8,169				10,370
Inventories		5,064				8,413
Other current assets		5,015				4,880
Current assets		37,146				43,667
Property, plant, and equipment (net)		13,762				22,203
Intangibles and other assets		18,238				71,563
Total assets	$	69,146			$	137,433
Liabilities and Shareholders' Equity:
Accounts payable	$	6,451			$	4,086
Short-term notes		3,680				11,359
Other current liabilities		8,718				13,613
Current liabilities		18,849				29,058
Long-term debt		4,330				7,130
Other long-term liabilities		6,344				23,339
Total liabilities		29,523				59,527
Capital stock (par and additional paid-in capital)		4,770				68,700
Retained earnings		43,158				41,537
Accumulated other comprehensive income (loss)		(810	)			250
Less: Treasury stock and other equity adjustments		(7,495	)			(32,581	)
Total shareholders' equity		39,623				77,906
Total liabilities and shareholders' equity	$	69,146			$	137,433
Income Statements
Net sales	$	47,747			$	51,073
Cost of goods sold		13,562				11,218
Gross profit		34,185				39,855
Operating expenses		21,105				29,828
Other (income) expensenet		(550	)			3,775
Income before taxes		13,630				6,252
Tax expense		4,089				1,876
Net income	$	9,541			$	4,376	*
Basic net income per share	$	2.97			$	0.77

* This is before income from discontinued operations. Evaluate and compare the two companies by responding to the following questions. Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate. Required: 1. For both companies, compute the ratios below. 2. Evaluate and compare the two companies.

Complete this question by entering your answers in the tabs below. Required 1: Required 2 For both companies, compute the ratios below. Pfizer times times days days times times days days Receivables Turnover (#.##) Average Collection Period (#) Inventory Turnover (###) Average Days in Inventory (#) Profit Margin (#.##)% Asset Turnover (#.### Return on Assets (# #% Equity Multiplier (8) Return on Shareholders' Equity (# =)% times Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Evaluate and compare the two companies. Analysis Which of the two companies appears more efficient in collecting its accounts receivable and managing its inventory? Which of the two firms had greater earnings relative to resources available? Have the two companies achieved their respective rates of return on assets with similar combinations of profit margin and turnover? From the perspective of a common shareholder, which of the two firms provided a greater rate of retur? From the perspective of a common shareholder which of the two firms appears to be using leverage more effectively to provide a return to shareholders above the rate of return or assets?