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 $ 19,507 $ 13,582 Short-term investments 6,636 12,892 Accounts receivable (net) 9,474 11,675 Inventories 6,288 10,637 Other current assets 6,410 6,275 Current assets 48,315 55,061 Property, plant, and equipment (net) 16,966 25,407 Intangibles and other assets 20,542 73,867 Total assets $ 85,823 $ 154,335 Liabilities and Shareholders' Equity: Accounts payable $ 7,666 $ 5,301 Short-term notes 5,759 13,438 Other current liabilities 9,843 14,738 Current liabilities 23,268 33,477 Long-term debt 5,455 8,255 Other long-term liabilities 7,451 24,446 Total liabilities 36,174 66,178 Capital stock (par and additional paid-in capital) 6,120 70,050 Retained earnings 53,103 51,482 Accumulated other comprehensive income (loss) (990 ) 295 Less: Treasury stock and other equity adjustments (8,584 ) (33,670 ) Total shareholders' equity 49,649 88,157 Total liabilities and shareholders' equity $ 85,823 $ 154,335 Income Statements Net sales $ 52,562 $ 55,888 Cost of goods sold 14,696 12,352 Gross profit 37,866 43,536 Operating expenses 22,203 30,926 Other (income) expensenet (685 ) 3,910 Income before taxes 16,348 8,700 Tax expense 4,905 2,610 Net income $ 11,443 $ 6,090 * Basic net income per share $ 3.42 $ 0.58 * 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.