Following are selected financial statement data from Abercrombie \& Fitch (ANF-upscale clothing retailer) and TJX Companies (TJX—value-priced clothing retailer including TJ Maxx)—both dated 2013.

Required

a. Compute the return on assets for both companies for the year ended 2013.

b. Disaggregate the ROAs for both companies into the profit margin and asset turnover.

c. What differences are observed? Evaluate these differences in light of the two companies' business models. Which company has better financial performance?

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($ millions) 2012 2013 2012 2013 Company TJX Companies Inc..... TJX Companies Inc.. Abercrombie & Fitch Abercrombie & Fitch ...... Total Assets $8,282 9,512 3,117 2,987 Net Income $1,907 237 Sales $25,878 - 4,511