Kohl?s Corporation is a national retail department store in the United States. Assume the company?s total revenues for the year ended January 29, 2017, were $18 billion. J.C. Penney is a similar-sized department store company with $18 billion of revenues. The following ratios for the two companies were obtained for that fiscal year from reuters.com/finance:

Required:

1. Which company appears more profitable? Describe the ratio(s) that you used to reach this decision.

2. Which company appears more liquid? Describe the ratio(s) that you used to reach this decision.

3. Which company appears more solvent? Describe the ratio(s) that you used to reach this decision.

4. Are the conclusions from your analyses in requirements 1 to 3 consistent with the value of the two companies, as suggested by their P/E ratios? If not, offer one explanation for any apparent inconsistency.

TIP: Remember that the share price in the top of the P/E ratio represents investors? expectations about future financial performance, whereas the bottom number reports past financial performance.

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J.C. Penney Ratio Kohl's Gross profit percentage 38.2% 39.2% Net profit margin 6.0% 2.1% Return on equity 14.0% 7.38% $3.75 $1.57 EPS 3.81 Inventory turnover ratio 3.46 2.41 Current ratio 2.08 0.98 Debt-to-assets ratio 0.96 23.3 P/E ratio 14.2