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	$	12,687			$	7,602
Short-term investments		5,406				11,662
Accounts receivable (net)		8,024				10,225
Inventories		4,928				8,187
Other current assets		4,860				4,725
Current assets		35,905				42,401
Property, plant, and equipment (net)		13,406				21,847
Intangibles and other assets		17,982				71,307
Total assets	$	67,293			$	135,555
Liabilities and Shareholders' Equity:
Accounts payable	$	6,316			$	3,951
Short-term notes		3,449				11,128
Other current liabilities		8,593				13,488
Current liabilities		18,358				28,567
Long-term debt		4,205				7,005
Other long-term liabilities		6,221				23,216
Total liabilities		28,784				58,788
Capital stock (par and additional paid-in capital)		4,620				68,550
Retained earnings		42,053				40,432
Accumulated other comprehensive income (loss)		(790	)			245
Less: Treasury stock and other equity adjustments		(7,374	)			(32,460	)
Total shareholders' equity		38,509				76,767
Total liabilities and shareholders' equity	$	67,293			$	135,555
Income Statements
Net sales	$	47,212			$	50,538
Cost of goods sold		13,436				11,092
Gross profit		33,776				39,446
Operating expenses		20,983				29,706
Other (income) expensenet		(535	)			3,760
Income before taxes		13,328				5,980
Tax expense		3,998				1,794
Net income	$	9,330			$	4,186	*
Basic net income per share	$	2.92			$	0.72

* 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.

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 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 2 Required 1 For both companies, compute the ratios below. J&J Pfizer Receivables Turnover (## #) Average Collection Period (#) Inventory Turnover (###) Average Days in Inventory (# Profit Margin (###)% Asset Turnover (## #) Return on Assets (##)% times days times days times days times days % % times times Equity Multiplier (### Return on Shareholders' Equity (##)% % % Required 2 Required 1