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The information below is excerpted from the financial statements of two companies active in the retail industry. Use this information and the proper financial ratio(s)

The information below is excerpted from the financial statements of two companies active in the retail industry. Use this information and the proper financial ratio(s) to answer the following questions. Show your calculations. You may (or may not) need to fill in missing information.

(in $ million)

Company X

Company Y

Net revenues

37296

107958

Net income

1188

3526

Accounts receivables

19908

910

Total current assets

29564

18672

Total assets

Total current liabilities

15370

12708

Total liabilities

32433

26494

Total stockholders equity

4500

14000

Footnote: Approximately 98% of Company Ys account receivables are from unpaid balances carried by customers using the store credit card.

A. Which company is better positioned to pay its bills in the short-run (i.e., is more liquid and less risky in the short-term)? Justify using appropriate ratio(s).

B. Is one company significantly more profitable than the other? Justify using at least 2 appropriate ratio(s).

C. Which company is more leveraged? Justify using appropriate ratio(s).

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