The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company:

Required
a. One of the companies is a high-end retailer that operates in exclusive shopping malls. The other operates discount stores located in low-cost, standalone buildings. Identify the high-end retailer and the discounter. Support your answer with appropriate ratios.
b. If Atlanta and Boston have equity of $168,000 and $122,700, respectively, which company is in the more profitable business?

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Atlanta* Boston Net sales Cost of goods sold Gross margin Less: Operating exp. Selling and admin. exp. Net income $210,000 (126,000) $230,000 (179,400) 84,000 50,600 (67,200) (32,200) $ 18,400