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	$	12,005			$	7,035
Short-term investments		5,283				11,539
Accounts receivable (net)		7,879				10,080
Inventories		4,792				7,911
Other current assets		4,705				4,570
Current assets		34,664				41,135
Property, plant, and equipment (net)		13,050				21,491
Intangibles and other assets		17,726				71,051
Total assets	$	65,440			$	133,677
Liabilities and Shareholders' Equity:
Accounts payable	$	6,181			$	3,816
Short-term notes		3,218				10,897
Other current liabilities		8,468				13,363
Current liabilities		17,867				28,076
Long-term debt		4,080				6,880
Other long-term liabilities		6,098				23,093
Total liabilities		28,045				58,049
Capital stock (par and additional paid-in capital)		4,470				68,400
Retained earnings		40,948				39,327
Accumulated other comprehensive income (loss)		(770	)			240
Less: Treasury stock and other equity adjustments		(7,253	)			(32,339	)
Total shareholders' equity		37,395				75,628
Total liabilities and shareholders' equity	$	65,440			$	133,677
Income Statements
Net sales	$	46,677			$	50,003
Cost of goods sold		13,310				10,966
Gross profit		33,367				39,037
Operating expenses		20,861				29,584
Other (income) expensenet		(520	)			3,745
Income before taxes		13,026				5,708
Tax expense		3,908				1,712
Net income	$	9,118			$	3,996	*
Basic net income per share	$	2.87			$	0.67

* 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.

* 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. J&J 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 (#.##) Return on Shareholders' Equity (#.#) % % times times (Required 1 Required 2 >