Gappo Group and Limito Brands maintain leading market positions in the specialty apparel retailing market. The products of Gappo (jeans, blouses, shirts) are more standardized than those of Limito. The products of Limito are more fashion-oriented and glitzy. Exhibit 7.24

presents comparative income statements for fiscal year 2013, and Exhibit 7.25

presents comparative balance sheets for Gappo and Limito at the ends of their 2012 and 2013 fiscal years. Cash flows from operations for fiscal year 2013 were $2,081 million for Gappo and $765 million for Limito. The income tax rate is 35%. On the basis of this information and appropriate financial statement ratios, which company is
a. More profitable in fiscal year 2013?
b. Less risky in terms of short-term liquidity in fiscal year 2013?
c. Less risky in terms of long-term liquidity in fiscal year2013?

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Gappo Group Limito Brands For the Year Ended August 31, 2013: $15,763 $10,134 146 230 $15,880 $10,510 .. Net Gains from Divestments of Retail Stores . .. . Expenses: $10,071 6,592 2,640 149 411 $15013 9,792 867 718 4,377 26 539 Interest.. Income Taxes.w..TNW Gappo Group Limito Brands For the Year Ended August 31: 2013 2012 2013 2012 ASSETS $1,018 355 1,251 295 $2,919 1,862 2,656 $7,437 $2,644 1,796 589 $5,029 3,197 318 $8,544 S 500 176 1,770 325 $2,771 1,862 2460 $7,093 Prepayments 572 Property, Plant, and Equipment (net)3,267 485 LIABILITIES AND SHAREHOLDERS' EQUITY 772 325 1,175 $2,272 188 910 $3,370 S 55 2,631 8,646 517 S 593 Current Portion of Long-Term Debt...TT. Other Current Liabilities. .. 138 1,108 $1,709 1,665 764 $4,138 S 262 1,565 4,277 (17) 7.912) 6,235) (4.382) 3,132) $2,955 57,093 850 $1,374 2,905 939 $5,218 $ 262 1,550 4,758 31 1,289 50 Accumulated Other Comprehensive Income 125 Total Shareholders' Equity..$4,274 Total Liabilities and Shareholders' Equity.$7,838 $5.174 $8,544 $2,219 $7,437