Selected balance sheet and income statement information from Urban Outfitters, Inc. and

Selected balance sheet and income statement information from Urban Outfitters, Inc. and TJX Companies, clothing retailers in the high-end and value-priced segments, respectively, follows.

a. Compute the 2017 return on assets (ROA) for both companies.

b. Disaggregate ROA into profit margin (PM) and asset turnover (AT) for each company. Confirm that ROA= PM x AT.

c. Discuss differences observed with respect to PM and AT and interpret these differences in light of each company's business model.

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